On The Economics Of Good Looks

Jul 19

First impressions matter, but why?
Originally Published At Inman News, April 2012

“If people think Jane is beautiful, and she is very organized and somewhat generous, people will see her as more organized and generous than she actually is.”
Professor Jeremy Biesanz, University of British Columbia, Psychology Today

In a sales-driven business like the real estate industry, we all know that first impressions matter. Unfortunately for some they matter more than hard work and expertise. The presentation of a professional appearance, appropriate dress, and sparkling and approachable insight can often make or break the deal. However, recent psychological research into how we behave differently around those who we perceive to be attractive, is leading marketers, analysts and even prospective employers to conclude that physical appearance in particular, can lead to greater success than that of those of average appearance.

Ray Williams, writing in Psychology Today describes a detailed study performed by 3 researchers at The University of British Columbia — Professor Jeremy Biesanz, the co-author Lauren Human (a PhD student), and Genevieve Lorenzo (an undergraduate student), who measured that individuals their subjects found to be attractive, were seen as more intelligent, friendly, and competent than others. They posed the interesting question, do we pay more attention to attractive people? And it would seem the answer is a definite yes. Overall, the study’s findings are fascinating, primarily concluding that we have a far heightened sense of the positive traits of a personality in those we like. The study began with the premise of measuring attractiveness, against openness, conscientiousness, extraversion, agreeableness and neuroticism, attempting to answer the question, ‘can a person’s attractiveness impact our ability to perceive their personality traits?’ 75 males and females were put into small groups for 3 minute periods, where they held one-on-one conversations, before they rotated into the next group. Then they were asked to rank the features of those they had conversed with.

Overwhelmingly, the study concluded that the subjects paid more attention to those they found more attractive, primarily because they were more motivated by curiosity, romantic interest, friendship and social status.

“Not only do we judge books by their covers, we read the ones with beautiful covers much closer than others.”
Ray Williams: ‘Why We Pay More Attention To Beautiful People’

Of course, one of the major counterpoints to such a study is that beauty is in the eye of the beholder, that it’s a purely subjective emotion. Not necessarily so, say the researchers. What the study also found was that there was general consensus of who was deemed attractive, and who was more ‘average’. Their perception of attractiveness was not as randomly subjective as one might initially think.

“Physical attractiveness is significantly, positively associated with general intelligence.”
Satashi Kanazawa, Lead Researcher, London School Of Economics

Conducting a much wider reaching study, researchers at London’s School Of Economics (LSE) found that attractive people are also smarter. Studying over 52,000 people from the United States and Great Britain, one of the conclusions was that attractive men were found to have Intelligence Quotients (I.Qs) 13.6 points higher than those perceived to be of average appearance. Similarly, more attractive women had I.Qs 11.4 points higher. Why would this be? While obviously not a prescription for how to treat others (and the study’s authors are keen to stress this in their findings), the study optimistically theorizes that intelligent men are more successful than men of lesser intelligence. In turn, beautiful women are attracted to successful men. Therefore, by partnering with attractive women, these successful, intelligent men produce more intelligent children over the long term. In short, obviously (and controversially) there’s a tremendous amount being assumed here, and when thinking of the most successful men in the world, beauty is simply not a word that often comes to mind, outside of Hollywood actors perhaps. While the theories proposed by the researchers are simplified exaggerations of actual behaviors, they begin to pose an interesting set of questions around the economics of successful, intelligent, and (in the researchers’ findings), more physically attractive people.

Michele Belot, reviewing Economics Professor at The University Of Texas in Austin, Daniel Hamermesh’s recent publication ‘Beauty Pays’ asks the question, in times of economic crisis, should analysts investigate premiums for being beautiful? We put premiums on other items of beauty in our lives, even to the point of luxury commodity status, so why not people? As Belot herself suggests, it’s an inherently difficult and uncomfortable question to pose, however backed by conclusive psychological research it might be, with unsettling historic parallels with racial and gender discrimination. She goes deeper, suggesting that viewing beauty through an economic lens is not only useful, but also intriguing and disturbing at the same time. Simply put, it’s a risky topic. Hamermesh himself, who has done the most extensive work in documenting the economic implications of physical attractiveness, suggests that people with ‘less than average’ looks incur a financial loss of over $140,000 over the course of their lifetime, compared with his definition of ‘average’ looking people. Startling conclusions, but Hamermesh maintains that a beauty premium exists in many occupations, even ones where you expect looks to have no active role to play. Of course, if you’re an actor, a model, or work in highly visible media environments for example, there are obvious beauty premiums on display. And while beauty is less objective than race or gender, Hamermesh, just like the researchers from British Columbia, suggests that there is still broad cultural agreement upon what constitutes beauty, even across cultures.

Hamermesh argues that beauty is a trait of economic good when it comes to products, so why not trade such a scarce resource everywhere? If that’s ultimately true, does physical beauty have a price? In certain industries such as fashion and cosmetics, very much so. He continues to stress how beauty matters because it has an inherent consumption value — customers, co-workers and employers are all more willing to work with attractive people. His research outlines several key examples, notably that more attractive people are more likely to obtain a loan — even with the same demographics and credit rating histories as worse-looking applicants. If the research’s conclusions ring true, then the economics of beauty absolutely have an economic consequence. In the conclusion of his book, Hamermesh poses the question of if there should be legal protection for those less physically attractive. While this may seem like something straight out of H.G.Wells or J.G. Ballard, the challenge to preconceived notions of ethical behavior leads Hamermesh to believe that legal protection is not only possible, but also justified.

With particular focus on the employment and earnings consequences of Hamermesh’s research, Sue Shellenbarger, writing in The Wall Street Journal, outlines how “… good looking people charm interviewers, get hired faster, and are more likely to make more sales and get more raises.” And perhaps with good reason, as Shellenbarger describes, the same research found that men’s good looks are paying off more than women’s (a factor usually attributable to there simply being more men in the workplace overall), especially when they relate to sales-driven careers, like real estate. Hamermesh continues by exploring the idea that better looking people tend to sell more products and attract more customers. However, if their inherent attractiveness raises their productivity, is the simple reward of paying them more for a higher level of contribution a form of discrimination? He ultimately maneuvers skillfully around the answer to this question, but does advocate avoiding professions where looks matter, going so far as to suggest that being better looking helps you in all occupations. Even those not traditionally thought of as being dependent upon physical appearance. For example, better looking professors are more appreciated by their students. Homely NFL quarterbacks earn less than their comelier counterparts, despite identical yards passed or years in the league (my sense is that endorsements and sponsorships are a large part of this discrepancy). Attractive people are even more likely to get loans than plain folk, even if they are less likely to be able to pay it back.

Similarly, research recently published in The Annals Of The New York Academy of Sciences also finds that the attractiveness of interviewees frames bias in hiring decisions on the part of potential employers. Carl Senior and Michael J R Butler, the authors of the report, also reach those same conclusions that attractive people are unconsciously assumed to have more positive social traits and greater intelligence. In gathering their findings, Senior and Butler measured interviewer bias with groundbreaking electrodermal response (EDR) technology, which records a psycho-physiological response tied to decision making. Think of it as a lie detector but focused on bias and decision making conclusions. They found that when conducting interviews, the potential employers were not so much driven by interpersonal attraction, but by emotional response at a cognitive and perceptual level. They were simply responding and reacting to how the person appeared to them, and if that perception was inherently negative, their capacity to even hear the interviewee was diminished. This study is the first to use such groundbreaking EDR technology to examine the influential role of beauty, status and physical appeal during negotiations.

“From a business point of view, there is a need for leaders and managers to be aware of their assumptions in decision-making processes, be they strategic or operational, and that they may be prone to emotional bias.”
Carl Senior & Michael J.R. Butler: ‘Who Knew? Good Looking People Get Better Jobs’

Stanford University’s Deborah Rhode, writing in ‘The Beauty Bias’ coins the term ‘pulchronomics’ — the economics of beauty, and it’s something that’s a fascinating thing to cross-compare with the neuroeconomics of Paul Zak I explored here last year. Rhode takes a more militant viewpoint than Hamermesh, or Zak, arguing that discriminating against people on the grounds of personal appearance should be banned, as it limits equal opportunity. But because physical perception is harder to define than race or gender, the obvious counter-argument is that anti-discrimination laws would of course, be impossible to maintain. Lastly, author Heather Huhman, citing a Rice University study, found that discrimination against the facially stigmatized, especially job applicants, when measured with eye-tracking technology and face to face investigation, proves a direct correlation between negative reactions and facial blemishes. Essentially the allocation of attention away from memory for the interview content leads to a disproportionate emphasis on appearance and less on an applicant’s actual responses. Simply put, the interviewer’s brain becomes confused and distracted.

So what do these findings mean for the real estate industry? Many will equate this with the ‘Raise The Bar’ movement, but it goes much deeper than that. There’s now concrete scientific research, verified and understood by multiple sources, that concludes that appearance is critical to the strength of professional success, especially sales. It’s always been an important part of any sales presentation, but perhaps given these data points, more so now than ever, especially in an era where so many things jostle for our attention — for good or bad we’re simply getting really smart at tuning out things we don’t like the look of. It’s much more than the in-person perception too of course. It’s the physical presentation you put forward online as well, and it’s a particular struggle if you perpetually hide behind an avatar that’s not you.

It’s an opportunity to stand for something, or not.

It’s an opportunity to present a professional, but approachable personal brand, or not.

And perhaps most importantly, it’s an opportunity to use this data to grow your business… or not.

The answer to these questions isn’t in an app, and it’s not something you can learn from a webinar. For many it will represent a potentially uncomfortable reframing of how they appear to their clients, and also how they’re perceived by those they interact with online. Hamermesh’s findings, while uncomfortable, controversial and contentious, are simply reflective of a much deeper understanding of how and why people behave as they do that psychologists are releasing as they research our increasingly online and interpersonal habits. As a digital marketer, and especially as a real estate professional, understanding and leveraging these findings can be powerful arrows in your marketing quiver.

Further Reading:

Michele Belot: ‘Beauty Pays: Why Attractive People Are More Successful’

Elizabeth Bogner: ‘13 Economic Facts About Beautiful People’

The Economist (Unattributed): ‘The Economics Of Good Looks’

Excerpts: ‘Are Good Looking People More Successful?’

Mike Fahey: ‘Attractive People Are Smarter Than YouToo’

Charles Feng: ‘Looking Good: The Psychology And Biology Of Beauty’

Daniel Hamermesh: ‘Beauty Pays: Why Attractive People Are More Successful’

Heather Huhman: ‘Are Good Looking People More Successful?’

Kate Lorenz: ‘Do Pretty People Earn More?’

Gordon L. Patzer: ‘Why Physically Attractive People Are More Successful’

Deborah L. Rhode: ‘The Beauty Bias: The Injustice Of Appearance In Life And Law’