Topline
A good look might make you a billionaire, but it won't help you reach the top of Forbes, according to a pair economists. This unusual paper is the latest in a growing collection of research that attempts price attractiveness.
German entrepreneur Stefan Quandt stands at MMK2, a new museum annex to modern art in Frankfurt am... Main, Germany on October 16, 2014. photo alliance via Getty Images
The Key Facts
Researchers asked 16 students from Australian universities to rate the appearance of 700 super-wealthy individuals whose photos and net worth were published in Forbes 2008 billionaires. The scale varied from very beautiful to very ugly. According to the paper, which was coauthored by Andrew Leigh, an economist and Barnard College scholar, and Daniel Hamermesh, a member of parliament from Australia, billionaires with a higher net worth didn't score significantly more attractiveness than those with lower net worths. Ultra-rich may look better than their less-rich peers. In a 2003 study, six undergraduates evaluated the looks of college professors. The billionaires received an average rating of 3.5 out of 5. This was a loose comparison, according to the authors.
Important Quote
According to Hamermesh (a research fellow at the German labor economics institute IZA), beauty is what matters. However, extra looks in that group of ultra-rich people are not going make any difference.
Important Background
Hamermesh spent decades studying how beauty affects economic fortunes. This is a robust area of research sometimes called pulchronomics. Some research also suggests that beauty can help people achieve success in politics, business and academia. He said that this beauty premium does not appear to increase billionaires fortunes.
Contra
Beauty is subjective. The NBER study was based only on 16 college students' assessments. Hamermesh still believes that these panelists' answers are reliable, as they often align in most cases. Hamermesh believes beauty is in the eyes of the beholder. However, we tend to see it the same way.
Surprising Fact
Which billionaires are most appealing? Hamermesh explained to Forbes that British entrepreneur David Ross, whose net worth dropped below $1 billion in the latter part of 2008, and BMW part-owner Stefan Quandt (currently worth $253 billion), earned the highest marks on the 2008 Forbes list. The other end of the scale saw the demise of Las Vegas resort magnate Kirk Kerkorian, who was followed by John Catsimatidis (New York supermarket magnate, currently worth $3.7 billion).
Big Number
4.76 This was the average attractiveness rating given to billionaires, slightly lower than the scales' midpoint of 5. This harsh assessment, and possibly unfair one, may be due to the fact that Forbes listees were on average 60 years old in 2008. This could have skewn the results. Hamermesh said that older people are rated lower, even though panelists are not asked to disregard age.
Tangent
According to the NBER paper, men, those who inherited a portion of their wealth, and those based in Western nations had slightly higher net worths that their counterparts on 2008 Forbes. This is a common theme: Only 14% of the Forbes 400, which ranks the 400 richest Americans, were women. 118 of them inherited some or all of their wealth.
Continue reading
Is Beauty Worth It? (Forbes)
