Naked self-promotion: the third edition of my book, Economics Is Everywhere (Worth Publishers), has just appeared. It contains little articles like those I have included on this blog (and, no doubt, some of the posts from this blog will be included in the fourth edition). I love many of the stories, but my all-time favorite from among the 700 that have been in the book’s various editions combines several basic economic ideas:
One of the students came up with what is perhaps the most amusing negative externality example that I have heard in my teaching career.
Her roommate is beautiful, but her roommate’s boyfriend, so she says, is very, very ugly. No problem, except that the roommate has a poster-sized photograph of the boyfriend on the wall on her side of the room, a poster that my student has to view whenever she is on her own side of the room.
I ask my student why, if the guy is so ugly, her roommate goes out with him, and she answers, “He goes to Harvard; and he’s also a very nice guy.” This illustrates the importance of human capital in the matching market that is dating, and also that looks aren’t everything, either. We also supply personality and the ability to get ahead, both of which are valued by the labor market and thus by potential spouses. Indeed, careful research shows that, compared with average-looking women, good-looking women marry guys with an extra year of education. Today, an extra year of education is associated with about an extra twelve percent annual earnings.
and 
. You can also watch it on 
Surely the question is not, “if he’s so ugly, why does she go out with him,” but, “if he’s so ugly, why is there a giant picture of him on the wall?
Prettier girls marry richer guys?
What a totally unexpected finding.
Yeah… ’cause richer guys aren’t douches like some who comment here…
We always get student reviews from different universities complaining that either the men or the women on their campuses aren’t good looking enough. However, people still tend to find each other. The study result about good looking women marrying guys with an extra year of education says a lot. People who value education might be more interesting, motivated, and have more engaging personalities. These are things that women are attracted to. Raj Pandravada sums it up perfectly: “I’d much rather watch attractive play by an unattractive player, than unattractive play by an attractive player.” Considering the decreasing rate of male college graduation, we might want to publicize these types of stats more. Great blog post, we love info like this.
It seems as there this is more about the economics of being a beautiful women than about the economics of dating an ugly man. I hope that 12% annual earnings is enough to cover the cost of make-up, hair-styling, and clothing that being beautiful requires.
I wonder if good looking men marry women with an extra year of education and earnings power? Maybe Harvard boy would have been with Harvard girl if he’d also been hot.
Well, I guess it pays to be both smart and beautiful, then!
But why the poster? The roomie can date the ugly guy without posting a picture of same on her wall. What is the incentive here for the poster being posted? Is the roomie attempting to convince the ugly boyfriend that she does not see him as ugly?
If I was this ugly boyfriend, there are a few other things this roomie could do to try to convince me that I am not ugly. Is this roomie aware of these things, does not want to take them underhand, and therefore uses a poster as a surrogate?
So money can make people better looking then? But the poster sized photograph goes way too far.