CASE STUDY

THE BENEFITS OF BEAUTY

People differ in many ways. One difference is in how attractive they are. The actor Brad Pitt, for instance is a handsome man. In part for this reason, his movies attract large audiences Surprisingly, the large audiences mean a large income for Mr. Pitt.

How prevalent are the economic benefits of beauty? Labor economists Daniel Hamermesh and Jeff Biddle tried to answer this question in a study published in the December 1994 issue of the American Economic Review. Hamermesh and Biddle examined data from surveys of individuals in the United States and Canada. The interviewers who conducted the “survey were asked to rate each respondent’s physical appearance. Hamermesh and Biddle then examined how much the wages of the respondents depended on the standard determinants-education, experience, and so on-and how much they depended on physical appearance.

Hamermesh and Biddle found that beauty pays. People who are deemed more attractive than average earn 5 percent more than people of average looks. People of average looks earn 5 to 10 percent more than people considered less attractive than average. Similar results were found for men and women. What explains these differences in wages? There are several ways to interpret the beauty premium.

One interpretation is that good looks are themselves a type of innate ability determining productivity and wages. Some people are born with the attributes of a movie star other people are not. Good looks are useful in any job in which workers present themselves to the public-such as acting, sales, and waiting on tables. In this case, an attractive worker is more valuable to the firm than an unattractive worker. The firm’s willingness to pay more to attractive workers reflects its customers’ preferences.

A second interpretation is that reported beauty is an indirect measure of other types of ability. How attractive a person appears depends on more than just heredity. It also depends on dress, hairstyle, personal demeanor, and other attributes that a person can controlPerhaps a person .Wh0  attractive image in a survey interview is more likely to be an intelligent person who succeeds at other tasks as well.

A third interpretation is that the beauty premium is a type of discrimination, a topic to which we return later.

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