Why Beauty Matters

Abstract

We decompose the beauty premium in an experimental labor market where "employers" determine wages of "workers" who perform a maze-solving task. This task requires a true skill which we show to be unaffected by physical attractiveness. We find a sizable beauty premium and can identify three transmission channels: (a) physically attractive workers are more confident and higher confidence increases wages; (b) for a given level of confidence, physically attractive workers are (wrongly) considered more able by employers; (c) controlling for worker confidence, physically attractive workers have oral skills (such as communication and social skills) that raise their wages when they interact with employers. Our methodology can be adopted to study the sources of discriminatory pay differentials in other settings.

Facing a Dilemma: Cooperative Behavior and Beauty

“…Attractive people earn significantly higher wages even though they do not display a higher productivity than unattractive people. We re-estimate Mobius and Rosenblat's full model (Table 6, p.234 in Mobius and Rosenblat (2006)) parsing the data into mixed-and samegender interactions. The results are presented in Table A.8 in the Appendix.…”

“…Furthermore, we cannot identify a beauty premium or plainness penalty during the pre-play, which clearly supports our conjecture that personal attraction serves as the underlying transmission channel of physical attractiveness on people's behavior in pairwise interactions and that attractiveness matters most when objective information is missing. To validate our results, we repeat the analysis of Mobius and Rosenblat (2006) and uncover that their identified effects of attractiveness disappear when we parse their data by the composition of sex, that is, when we consider interactions between employers and workers of the same sex separately from those of the opposite sex. Again, "beauty-is-good" stereotyping fails to consistently explain the findings.…”

“…In their seminal work Biddle and Hamermesh (1998) use a broad household survey of the U.S. and Canada and show that physically attractive employees earn about 10-15 percent more than less attractive employees, independent of their occupation. In an experiment on the effects of beauty in experimental labor markets, Mobius and Rosenblat (2006) find that attractive employees are awarded higher wages, although they are not more productive than unattractive employees, measured by a real-effort task. This suggests that employers hold (inaccurate) stereotypical expectations about the performance of physically attractive employees.…”

“…3 Besides the theory of stereotyping based upon peoples' visual attractiveness, Zuckerman and Driver (1989) and Zuckerman, Hodgins, and Miyake (1990) proclaim the existence of a vocal attractiveness stereotype by showing that physical attractiveness is positively correlated with vocal attractiveness. Supporting a vocal-attractiveness mechanism, Mobius and Rosenblat (2006) find that the beauty premium even exists in treatments in which employers are able to talk to the employee without seeing the employee's picture. Rosenblat (2008) provides evidence that physically attractive people only achieve significantly better outcomes in dictator games when the dictator sees the recipient's picture in addition to hear her pre-recorded voice.…”

“…14 Both gender and age seem to mediate the effect of a contestant's own attractiveness on 13 Table V reports the regression results including a dummy variable for the attractive contestant. For robustness of all our results, we also estimate the regressions including (i) the continuous measure for attractiveness, (ii) the mean over the four appearance variables, (iii) the predicted factors obtained in a confirmatory factor analysis of the four appearance variables, (iv) a normalized attractiveness measure in line with Mobius and Rosenblat (2006), in which our constructed attractiveness measure is normalized across all contestants, (v) a normalized attractiveness measure in line with Biddle and Hamermesh (1998), in which the normalization is across all raters, and (vi) the mean and median attractiveness ratings of the raw data, where the mean (median) is 0.443 (0.728) with an average rating of facially attractive contestants above the mean (median) of 5.552 (4.914), and below the mean (median) of 3.196 (2.357). All measures produce qualitatively the same results.…”