Impact of Beauty on Earnings and Expenditures: Analytical Essay

1. Labour economists should study the economic pay off of beauty because people spend large sums of money on beauty products, and this leads to an increase in consumption which leads to an increase in the GDP of the country. In 2008 American households spent about a total of $400 Billion on beauty products and clothing, also this accounts for nearly 5 percent of all consumers’ spending that year.

One of the characteristics of economics is the study of scarcity and of the benefits that scarcity creates, as an economist the issue of studying beauty must be that there is shortage of beauty and people are wiling to pay more money to obtain it and to enjoy beauty.

Again, beauty is surely a personal characteristic that can change the kinds of jobs and occupations that people choose and this is the behavior of consumers which also falls under the study of economics. Moreover, if beauty affects behavior in labor markets and therefore generates the differences in wages and the kinds of jobs that people hold, it may also produce changes in how we choose to use our time outside our jobs.

Since beauty affects wages and employment it can also affect how companies and government employ workers with different looks. Also beauty can be traded, and the benefit of trading beauty is that an additional income is obtained and an increase in income means that the standards of living will be improved and consumers’ desire for more will be satisfied.

2. Good looking people are expected to earn more than their bad looking counterparts, because the employers simply prefer to work with good looking workers even when they do not have a biased belief about the workers actual ability, and also some customers prefer to interact with better looking workers, so this shows that beautiful people have great advantage of getting well-paying jobs and being hired or finding jobs more easily.

In addition, in 2008 during the summer Olympic, the Chinese producers placed an extremely cute nine-year-old girl on worldwide television to lip-sync the singing of a less attractive child who had a better voice, this can be an example of showing that good looking people can earn more than the ugly ones, because now the cute girl who lip-synced have more advantages than the girl with the nice voice, since she appeared on a worldwide television and known s the singer.

In America people reported themselves as having experienced discrimination based on their appearances, and also there is a belief that good looking workers are more productive or more capable even when workers ability is not observed hence why we should expect the ugly ones to be underpaid. With a common standard of beauty, labor markets establish premium pay for the good-looking workers and penalty pay for the ugly workers based on the extent to which employers’ value looks.

3. Is there any economic pay-off of beauty? That is the research problem, and the study’s research objective is to find the effects of beauty on earnings, while the research object is beauty in the labor market. In this research survey secondary data was used, of which beauty is an independent variable and earnings are dependent variables. Survey was conducted by four students who were beginning their graduate studies; they were to rate number of pictures of leading economist, and six raters were chosen to conduct a survey on professors.

The measurements used in this research are the scale of 5 to 1 and 10 to 1, and 5 to 1 is the mostly used scale in the beauty literature. And in 1971 the interviewer was instructed to rate the respondents’ physical appearance using 5 to 1 scale, the scale is as follows:

• 5 strikingly handsome or beautiful
• 4 Good-looking (above average for age and sex)
• 3 Average looks for age and sex
• 2 Quite plain (below average for age and sex)
• 1 Homely

This scale was used in a Michigan survey. The ratings that were in relation with the study conducted later in the year 1970 were used in 1971 which makes it secondary data. Methods that were used in this study are life interviews and photographs.

The findings of this study are that beautiful people earn more than bad looking people, in 1970s percentage effects of looks on earnings in U.S, we saw that women rated as below average received 4 percent lower pay than average looking women and those rated as above-average, received 8 percent more than average-lookers. For men, the comparable figures are a 13 percent penalty and a 4 percent premium.

4. In American data we saw that below average looking women earn 3 percent less while below average looking men earn 22 percent less compared to the average group, and also above average looking women earn 4 percent more while above average looking men earn 3 percent more than the average group and this shows that the estimated effects on earnings are larger for male workers than for female workers

The estimated effects on earnings are larger for males worker than for female workers this is because women are faced with greater discrimination when it comes to looks, and the penalty for bad looks is larger among women than men, also women are more likely to stay out of the labour force than men due to decisions taken by women, they look at the opportunity cost of going to work (leisure, child care and household chores) and bad looks contributes more to women avoiding the labour market.

5. It is assumed that the interviewer’s rating of beauty is based on the interviewees’ face. Here the argument is that observers can assess the beauty of a face independently of weight and height of an individual of which might be a problem if they also affect earnings. Things being so, a lot of research by economist and others over a long period of time both in the Unite States and other countries, they discovered that obesity lowers earnings, holding all else constant, and that is mostly true among women. If people judge the appearance of obese people as being below average, assuming obesity equals ugliness, the negative effect of bad looks on earnings could just be because of the effect of being obese.

The impact of beauty on earnings using the interviewers’ rating of interviewees’ physical appearance was observed. Homely people earn less than average while average earn less than good-looking, the penalty is 5-10 percent, homely people withdraws from labour force and good-looking people get into occupations where beauty may be more productive, however the impact of looks is mostly independent of earnings or occupation, meaning existence of pure employer discrimination