Beauty Pays

1. Beauty Pays: It's a Real Economic Factor

The economic approach treats beauty as scarce and tradable.

Beauty as a Commodity. This book argues that beauty, like any other scarce resource, has economic value. People are willing to spend time and money to enhance their appearance, and this spending fuels entire industries. This isn't just about vanity; it's about the perceived advantages that beauty brings in various aspects of life.

• The average American household spends hundreds of dollars annually on clothing and personal care.
• This spending accounts for a significant percentage of all consumer spending.
• Concerns about appearance are not unique to modern times or specific cultures.

Scarcity and Value. Beauty is scarce because not everyone is considered equally attractive. This scarcity creates a demand for beauty, making it a tradable commodity. People exchange beauty for higher income, better jobs, and more desirable social connections. This exchange is not always explicit, but it is a powerful force in shaping economic and social outcomes.

Economic Lens. By applying an economic lens to beauty, we can understand how it affects behavior in various markets. This approach allows us to measure the impact of beauty on wages, employment, and even marriage prospects. It also helps us to identify the mechanisms through which beauty generates its effects.

2. Beauty Standards: More Universal Than You Think

“Beauty is in the eye of the beholder,” the first stock phrase that comes to your mind when asked about human beauty, suggests that people’s opinions about this question of human beauty differ.

Common Standards. While individual preferences vary, there is a surprising degree of agreement on what constitutes human beauty. This agreement is not limited to specific cultures or time periods. People across the world tend to view certain facial features and characteristics as more attractive than others.

• Examples include symmetry, clear skin, and certain facial proportions.
• Even though beauty standards change over time, there is a core set of characteristics that are consistently valued.
• This common standard is crucial for beauty to have an economic impact.

Physiognomy Focus. For the purposes of economic analysis, the book focuses primarily on facial beauty (physiognomy). This is because faces are readily observable and can be used as a basis for judgments about attractiveness. While other aspects of appearance matter, the face is often the first and most important factor in how we perceive others.

Subjectivity and Agreement. While beauty is subjective, there is enough agreement to make it a meaningful concept. People may disagree on the margins, but there is a general consensus on who is considered attractive and who is not. This consensus allows beauty to function as a scarce and tradable commodity.

3. The Beauty Premium: Real, Measurable, and Significant

The top one-third of women by looks, those rated as above-average (4 or 5), received 8 percent more than average-lookers. For men, the comparable figures are a 13 percent penalty and a 4 percent premium.

Earnings Impact. Good-looking people earn more than average-looking people, and bad-looking people earn less. This "beauty premium" and "ugliness penalty" are not just anecdotal; they are supported by empirical evidence. These effects persist even after accounting for other factors that affect earnings, such as education, experience, and health.

• Below-average-looking women earn 4% less than average-looking women.
• Above-average-looking women earn 8% more than average-looking women.
• Below-average-looking men earn 13% less than average-looking men.
• Above-average-looking men earn 4% more than average-looking men.

Substantial Effects. The impact of beauty on earnings is not trivial. It is comparable to the effect of an additional year or two of education or several years of work experience. Over a lifetime, these differences in earnings can amount to hundreds of thousands of dollars.

Beyond Earnings. The beauty premium extends beyond earnings. Good-looking people may also have better access to opportunities, promotions, and other forms of success. This suggests that beauty is a valuable asset in many aspects of life.

4. Beauty and Occupation: Looks Matter in Unexpected Places

People choose the paths that grant them the greatest rewards for the least amount of effort.

Occupational Sorting. People tend to choose occupations where their looks are an advantage. Good-looking people are more likely to enter fields where appearance matters, such as sales, acting, and politics. Conversely, bad-looking people may avoid these fields and choose occupations where looks are less important.

• Litigators are rated as better-looking than tax attorneys.
• Prostitutes who are rated as attractive earn more than those rated as less attractive.
• Better-looking politicians are more likely to be elected.

Beauty in Unexpected Fields. Even in fields where you might not expect looks to matter, they often do. Better-looking professors receive higher teaching evaluations, and better-looking economists are more likely to be elected to professional offices. This suggests that beauty has a pervasive influence on human behavior.

Selection and Payoffs. While people sort into occupations based on their looks, there is still variation in beauty within each occupation. This variation allows differences in beauty to affect earnings and other outcomes, even within fields where looks are not the primary focus.

5. Employers and Beauty: It's Not Just About Personal Preference

The extra wages paid to the good-looking workers are more than offset by the extra revenue that the workers’ looks help to generate.

Sales and Revenue. Employers often hire good-looking workers because they believe it will increase sales. Customers may prefer to deal with attractive salespeople, and this preference can translate into higher revenue for the company. This is not just about personal preference; it's about the bottom line.

• Advertising firms with better-looking executives generate more revenue.
• Charitable organizations raise more money with better-looking solicitors.
• Companies with better-looking CEOs may perform better.

Profitability and Survival. Companies that pay a premium for good-looking workers can survive because those workers generate more revenue. The extra costs are offset by the extra sales, and in some cases, the company may even make extra profits. This suggests that beauty is not just a cost; it can be a valuable asset.

Beauty as Capital. The beauty of a worker, especially a senior worker, can become a shared asset between the worker and the company. The worker's looks can inspire other workers and enhance their productivity. This shared capital can lead to higher profits for the company and higher pay for the worker.

6. Beauty's Impact: Beyond the Workplace

We trade our looks for other things when we date and marry; but what are those other things, and how much of them do our looks enable us to acquire?

Social Exchanges. Beauty affects not only economic transactions but also social exchanges. People trade their beauty for friendship, social status, and romantic relationships. This exchange is not always explicit, but it is a powerful force in shaping social interactions.

Dating and Marriage. In dating and marriage markets, beauty is a valuable asset. Good-looking people tend to match with other good-looking people, and they also tend to match with people who have other desirable characteristics, such as intelligence, education, and wealth.

• Women tend to trade their looks for men's earning potential.
• Men tend to value women's looks more than women value men's looks.
• Spouses tend to be similar in terms of their looks.

Credit and Lending. Even in credit markets, beauty can play a role. Good-looking people are more likely to obtain loans and may receive more favorable terms. This suggests that beauty can affect access to financial resources.

7. The Ugly Truth: Legal Protections and Future Prospects

We have met the enemy and he is us.

Discrimination and Fairness. The book raises the question of whether it is fair that bad-looking people are disadvantaged in so many ways. It explores the possibility of legal protections for the "looks-challenged," similar to those offered to other disadvantaged groups.

• Existing anti-discrimination laws protect against discrimination based on race, gender, religion, and disability.
• Some jurisdictions have extended these protections to include weight and height.
• A few jurisdictions have even banned discrimination based on appearance.

Arguments for and Against Protection. There are arguments for and against protecting the ugly. On one hand, bad looks are an immutable characteristic that can lead to significant disadvantages. On the other hand, protecting the ugly may come at the expense of other disadvantaged groups.

Future of Beauty. The book concludes by acknowledging that beauty is likely to continue to matter in the future. While society may evolve, our perceptions of beauty are deeply ingrained. The best approach for bad-looking people is to focus on their strengths and minimize the impact of their disadvantages.

Last updated: January 28, 2025