When are Appearances Deceiving? The Nature of the Beauty Premium

28 Pages Posted: 29 Sep 2013

Date Written: August 15, 2013

Abstract

We design a laboratory experiment to illuminate the channels through which relatively more attractive individuals receive higher wages. Specifically, we are able to distinguish taste-based discrimination from rational statistical discrimination and biased beliefs. Using three realistic worker tasks to increase the external validity of our results, we find that the “beauty premium” is highly task-specific: 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. The premium in the bargaining task is driven by biased beliefs about worker performance. We 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.

Keywords: beauty premium, discrimination, economic experiments, labor markets

JEL Classification: C91, J31, J71

Suggested Citation

Deryugina, Tatyana and Shurchkov, Olga, When are Appearances Deceiving? The Nature of the Beauty Premium (August 15, 2013). Available at SSRN: https://ssrn.com/abstract=2332283 or http://dx.doi.org/10.2139/ssrn.2332283

Tatyana Deryugina (Contact Author)

University of Illinois ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

HOME PAGE: http://deryugina.com

Olga Shurchkov

Wellesley College ( email )

106 Central St., PNE 417
Wellesley, MA 02481
United States

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