Is there a premium for being beautiful? And if there is, why is that so? In times of global economic crises, one may perhaps wonder whether economists should investigate these questions. This book certainly makes an excellent case for that kind of investigation. Daniel Hamermesh provides a clear and exhaustive account of two decades of research showing that more attractive people fare much better than others in many dimensions of life - from how much they earn to whom they marry - and digs deep into the reason. He draws striking parallels with racial and gender discrimination, which appear to be of similar magnitude. He calculates that over their lifetime, people with "less than average" looks incur a financial loss of approximately $140,000 (£89,300) in comparison with average-looking people. Beauty Pays shows that viewing beauty through an economic lens is useful, intriguing and disturbing.
Pioneering work by Hamermesh, and the research by others who followed, raises further questions. How can beautiful people earn a premium in a world where firms strive for profit and compete with each other? Why are employers that discriminate in favour of the beautiful not driven out of the market? The puzzle is particularly intriguing because, as Hamermesh notes, a beauty premium exists in many occupations, even those where one would expect that looks have no role to play, such as among rugby players or even academic economists.
From an economist's perspective, the analysis of a beauty premium is similar to the analysis of gender or racial differentials. One notable difference, though, is that beauty is arguably less objective. It is, as the saying goes, in the eye of the beholder. But Hamermesh points out that, despite the lack of an objective measure, there is a remarkably broad agreement in assessments of beauty, even across cultures. And it is precisely because we agree and share common preferences for beauty that it becomes an "economic good" - a scarce resource that can be traded. This is also why it makes sense to ask whether beauty has a price.
Hamermesh offers a clear discussion of possible reasons why attractive people fare better in the labour market and sometimes generate more profit for their companies. Could beauty be correlated with other productive characteristics, such as intelligence, health or personality? In fact, it turns out that the estimates of the beauty premium hardly change when taking these other characteristics into account, except perhaps for self-confidence. So why does beauty matter? The most plausible explanation is that it has a consumption value. Customers, co-workers and employers are willing to pay to interact with more attractive people.
Beauty not only affects how much we earn or whom we marry, it is valued in many other markets, most surprisingly in markets with no obvious role for looks. For example, more attractive people are also more likely to obtain a loan - even with the same demographics and credit histories as worse-looking applicants.
The last chapter of the book raises the question: should there be legal protection for the ugly? Is such a thing even possible? Hamermesh offers convincing arguments that legal protection is both possible and justified. Indeed, he has acted as consultant in a number of cases in the US involving people who had suffered an injury that significantly affected their looks, such as children severely bitten by dogs. A number of them received compensation - sometimes substantial.
Beauty Pays is a pleasant and interesting read, but along the way it will challenge many of your preconceptions and leave you wondering why we as a society do not do more to protect those with less desirable looks.
Beauty Pays: Why Attractive People Are More Successful
By Daniel S. Hamermesh. Princeton University Press. 228pp, £16.95. ISBN 9780691140469. Published 19 September 2011