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Now you see it, now you don’t: The vanishing beauty premium

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  • Deryugina, Tatyana
  • Shurchkov, Olga

Abstract

We design a laboratory experiment to test the extent to which the often-observed “beauty premium” – a positive relationship between attractiveness and wages – is context-specific. Using three realistic worker tasks, we find that the existence of the “beauty premium” indeed depends on the task: while relatively more attractive workers receive higher wage bids in a bargaining task, there is no such premium in either an analytical task or a data entry task. Our analysis shows that the premium in bargaining is driven by statistical discrimination based on biased beliefs about worker performance. We also find that there is substantial learning after worker-specific performance information is revealed, highlighting the importance of accounting for longer-run interactions in studies of discrimination.

Suggested Citation

  • Deryugina, Tatyana & Shurchkov, Olga, 2015. "Now you see it, now you don’t: The vanishing beauty premium," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 331-345.
    • Handle: RePEc:eee:jeborg:v:116:y:2015:i:c:p:331-345
    DOI: 10.1016/j.jebo.2015.05.007
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    4. Chan, Ho Fai & Ulrich, Fabian & Altman, Hannah & Schmidt, Sascha L. & Schreyer, Dominik & Torgler, Benno, 2022. "Beyond performance? The importance of subjective and objective physical appearance in award nominations and receptions in football," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 271-289.
    5. Ahmed, Shaker & Ranta, Mikko & Vähämaa, Emilia & Vähämaa, Sami, 2023. "Facial attractiveness and CEO compensation: Evidence from the banking industry," Journal of Economics and Business, Elsevier, vol. 123(C).
    6. Nas Ozen,Selin Efsan & Hut,Stefan & Levin,Victoria & Munoz Boudet,Ana Maria, 2020. "A Field Experiment on the Role of Socioemotional Skills and Gender for Hiring in Turkey," Policy Research Working Paper Series 9154, The World Bank.
    7. Kseniya Bortnikova, 2020. "Beauty and Productivity: A Meta-Analysis," Working Papers IES 2020/18, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Jun 2020.
    8. Ling, Leng & Luo, Danglun & Li, Xiaoxia & Pan, Xintong, 2022. "Looking good by doing good: CEO attractiveness and corporate philanthropy11We thank the co-editor (Suqin Ge) and the referees for many valuable comments and suggestions. We thank Huimin Li and Jing Sh," China Economic Review, Elsevier, vol. 76(C).
    9. Hansson, Kajsa & Habibnia, Hooman & Goetze, Minou & Fiedler, Susann, 2024. "The beauty of prosocial behavior: The bi-directional link between attractiveness and prosocial behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 219(C), pages 305-317.
    10. Shtudiner, Zeev & Siniver, Erez & Tobol, Yossef & Yaniv, Gideon, 2024. "Female attractiveness engenders honesty among men but dishonesty among women," Journal of Economic Behavior & Organization, Elsevier, vol. 218(C), pages 592-598.
    11. Congcong Li & An-Ping Lin & Hai Lu & Kevin Veenstra, 2020. "Gender and beauty in the financial analyst profession: evidence from the United States and China," Review of Accounting Studies, Springer, vol. 25(4), pages 1230-1262, December.
    12. Peng, Langchuan & Wang, Xi & Ying, Shanshan, 2020. "The heterogeneity of beauty premium in China: Evidence from CFPS," Economic Modelling, Elsevier, vol. 90(C), pages 386-396.
    13. Joseph T. Halford & Hung‐Chia S. Hsu, 2020. "Beauty is wealth: CEO attractiveness and firm value," The Financial Review, Eastern Finance Association, vol. 55(4), pages 529-556, November.
    14. Rachel Lau & Brooke Krause, 2022. "Preferences for perceived attractiveness in modern dance," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 46(3), pages 483-517, September.
    15. Balafoutas, Loukas & Fornwagner, Helena & Grosskopf, Brit, 2023. "Predictably competitive? What faces can tell us about competitive behavior," Games and Economic Behavior, Elsevier, vol. 142(C), pages 931-940.
    16. Dilmaghani, Maryam, 2020. "Beauty perks: Physical appearance, earnings, and fringe benefits," Economics & Human Biology, Elsevier, vol. 38(C).
    17. Kimberly Scharf & Oleksandr Talavera & Linh Vi, 2023. "Gender Differences in Returns to Beauty," Discussion Papers 23-08, Department of Economics, University of Birmingham.
    18. Ruffle, Bradley J. & Sherman, Arie & Shtudiner, Zeev, 2022. "Gender and beauty price discrimination in produce markets," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 97(C).
    19. Canace, Thomas G. & Cianci, Anna M. & (Kelvin) Liu, Xiaotao & Tsakumis, George T., 2020. "Paid for looks when others are looking: CEO facial traits, compensation, and corporate visibility," Journal of Business Research, Elsevier, vol. 115(C), pages 85-100.

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    More about this item

    Keywords

    Beauty premium; Discrimination; Economic experiments; Labor markets;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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