Friday, 28 December 2018

The beauty premium in the LPGA

Daniel Hamermesh's 2011 book Beauty Pays: Why Attractive People are More Successful (which I reviewed here) makes the case that more attractive people earn more (or alternatively, that less attractive people earn less). However, the mechanism that drives this beauty premium (or even its existence) is still open to debate. It could arise because of discrimination - perhaps employers prefer working with more attractive people, or perhaps customers prefer to deal with more attractive workers. Alternatively, perhaps more attractive workers are more productive - for example, maybe they are able to sell more products.

However, working out whether either of these two effects, or some combination of both, is driving the beauty premium is very tricky. A 2014 article by Seung Chan Anh and Young Hoon Lee (both Sogang University in Korea), published in the journal Contemporary Economic Policy (sorry I don't see an ungated version) provides some evidence on the second effect. Anh and Lee use data from the Ladies Professional Golf Association (LPGA), specifically data from 132 players who played in at least one of the four majors between 1992 and 2010. They argue that:
Physically attractive athletes are rewarded more than unattractive athletes for one unit of effort. Being rewarded more, physically attractive athletes devote more effort to improving their productivity. Consequently they become more productive than less attractive athletes with comparable natural athletic talents.
In other words, more attractive golfers have an incentive to work harder on improving, because they can leverage their success through higher earnings in terms of endorsements, etc. However, Anh and Lee focus their analysis on tournament earnings, which reflect the golfers' productivity. They find that:
...average performances of attractive players are better than those of average looking players with the same levels of experience and natural talent. As a consequence, attractive players earn higher prize money.
However, in order to get to those results they have to torture the data quite severely, applying spline functions to allow them to estimate the effects for those above the median level of attractiveness. The main effect of beauty in their vanilla analysis is statistically insignificant. When you have to resort to fairly extravagant methods to extract a particular result, and you don't provide some sense of robustness by showing that your results don't arise solely as a result of your choice of method, they will always be a little questionable.

So, the take-away from this paper is that more attractive golfers might work harder and be more productive. Just like porn actresses.

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