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.
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“Today, an extra year of education is associated with about an extra twelve percent annual earnings.”
Does this apply to every additional year of education? Would someone who spent 7 years pursuing an Ph.D. and then a career that wouldn’t earn the additional 84% earning still wind up that far ahead?
She should put the roommate’s boyfriend poster up on her side of the room. Then it will be at a steep enough angle that she cannot see it.
But, her roommate will see it from her side of the room.
She could also ask her roommate to put up a poster of her choosing in the place of the boyfriend’s picture, to keep things fair.
“He goes to Harvard; and he’s also a very nice guy.”
IE: He will be very wealthy (if not already from a wealthy family) and she can tolerate him.
So, as a student, she may be a trophy wife in training looking for cash heavy husband. Roll it forward some years/decades and she may have a very good looking male business associate who she needs to travel with on occasion when she finds out how life really works…
Conditioning. You can love ugly things, I have an ugly dog that I adore because she has a great personality. I have a large framed photo of her, when I look at her it pleases me. She makes me happy, seeing her makes me happy. One can be both ugly and attractive, one can be beautiful and repellent.
This relationship makes sense to me. The very attractive partner is betting that her ugly mate cannot easily replace her with someone as attractive as she is…until she gets much older and he is (hopefully) much richer. If there is no prenup agreement, she can collect a hefty going away fee at that time. If she was less attractive or if he was more attractive it would likely be a more level playing field.
Joey: “Does this apply to every additional year of education? Would someone who spent 7 years pursuing an Ph.D. …”
Speaking as a Ph. D., no, it doesn’t work that way. I can say that the opportunity cost of lost earnings while on my way to the Ph. D. will probably never be earned back. A Ph. D. makes no economic sense, I probably wouldn’t do it knowing what I know now.
My freshman roommate had a huge photo of her ugly boyfriend up on the wall. She wasn’t pretty. The same negative externality that applied to your student applied to me.
But, I am really wondering if the point of the post is to discuss why seemingly beautiful people don’t always date others that a equally beautiful.
I can’t remember if there was any sort of formal statistical study done, but I do remember reading a story awhile back discussing how nerdy men often end up marrying attractive women (my husband — a rather nerdy but lovable engineer — got quite a kick out the article).
Part of the reasoning behind such paring is that these ‘nerds’ tend to be nicer and more respectful to these women than their more hunky counterparts. Of course there was mention of greater success, stability, personality and the like as well.
It would be interesting to see how the woman’s education level matches up with the man’s in these cases. Do these women tend to be higher educated as well, so they have greater preference for men who are on par intellectually, regardless of looks? Or do you get more of the dense trophy wife effect?