Transcript Does Beauty Matter? Evidences from Public Goods Provision

Does Beauty Matter? Evidences
from Public Goods Provision
ARTI ADJI
FACULTY OF ECONOMICS AND BUSINESS
UNIVERSITAS GADJAH MADA
Background (1)
 The existence of a beauty premium in the labor
market and the male–female wage gap suggests that
appearance can matter in the real world.
 Among the randomly selected people who responded
to the survey, more felt that discrimination based on
looks in the US exceeded discrimination on
ethnicity/national background.
Background (2)
 It is crucial to know how beauty generates its effects
if we are to guard against giving undue importance to
its role in the functioning of labor markets. It is also
important in weighing the benefits and costs to
society of our attitudes about human beauty.
Some Facts
 The average American husband spends thirty-two
minutes on a typical day washing, dressing, and
grooming, while the average American wife spends fortyfour minutes. American women age seventy and older
spend forty-three minutes.
 In 2008, the average American household spent $718 on
women’s and girls’ clothing; $427 on men’s and boys’
clothing; $655 on infants’ clothing, footwear, and other
apparel products and services; and $616 on personal care
products and services. Such spending totaled roughly
$400 billion and accounted for nearly 5 percent of all
consumer spending that year.
Previous Studies (1)
 Hamermesh and Biddle (1994): there is a significant
premium to beauty, with attractive people earning
more money than unattractive people.
 O’Neill (2003): when controlling for age and
experience, men earn about 25 percent more than
women. While some of these differences can be
attributed to labor market factors, much of the
beauty premium and wage gap remains unexplained.
Previous Studies (2)
 Andreoni and Petrie (2008): there is an evidence for a
beauty premium. This premium, however, disappears
once people know exactly what each group member
contributed to the public good. When only the total
group contribution is observable, attractive people make
more money than unattractive people, even though they
are no more or less cooperative, on average, than
unattractive people. When individual contributions are
observable, the reward to being beautiful disappears.
People seem to expect beautiful people to be more
cooperative than others, and when their behavior does
not meet expectations, people are less cooperative with
them. There is also a difference in payoffs for men and
women, but not always favoring men.
Why Experiments?
 Replicability
 Control
Purpose: searching for the facts.
Validity of Experimental Design
 Non-satiation
 Saliency
 Reward dominance
Design (1) – Firdaus (2010)
 Subjects are given 4 cards: 2 black cards and 2 red cards.
 Subjects are asked to hand in 2 (out of 4) cards that






she/he has: 2 red cards or 2 black cards or 1 black and 1
red card.
For each red card that a subject hands in is donated in a
group exchange, i.e. she/he and the whole class will get
Rp1000 from each red card that she/he gives.
For each red card that a subject keeps will go to the
individual exchange, i.e. she/he will get Rp4000 from
each red card that she/he keeps and the class will NOT
get any Rp from it.
Black cards do not generate Rp.
Payoffs = (number of red cards that a subject keeps x
Rp4000) + (number of red cards that are handed in or in
the group exchange x Rp1000)
There are 3 sessions.
There are 4 rounds in each session
Design (2)
 Subjects are divided into two groups in Session 1 and
into six groups in Session 2 and Session 3.
 Prior to the experiment, subjects are asked to fill in
‘closeness’ form and ‘attractiveness’.
 Prior to the experiment, subjects are also asked to fill
in demographic questionnaire.
Results (1)
 In earlier rounds, attractiveness does matter. In
latter round, it doesn’t.
 In earlier rounds, closeness matters. In latter round,
it doesn’t.
 Female subjects donate more.
 Non-javanese subjects donate more.