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montaya_zepeda - ErnestoZepeda SandyMontoya...

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Ernesto Zepeda Sandy Montoya Why Beauty Matters We focus on the economic paper of Markus M. Mobius and Tanya S. Rosenblat titled Why Beauty Matters. These economists have noticed that physical attractiveness affects wages. This beauty premium says that workers of above average earn about 10 to 15 percent more than workers that are below average in physical attractiveness. The premium has become economically significant due to it is comparable to the race and gender gaps in the U.S. labor market. The key topic of the paper is to decompose the beauty premium that arises during the wage negotiation process between employer and worker in an experimental labor market by varying the degree of oral and visual interaction between workers and employers. The broader context of this experiment is that the same type of method can be used to study different types of wage discrimination in the labor market. New research in labor economics has shown that there’s an importance in skills like confidence, for example, for market success and the role of beauty to acquire these skills. Next we look at our data sources: Subjects The data acquired in order to answer this question was through a controlled lab experiment. The subjects used were undergraduate and graduate students from three universities in Tucuman, Argentina. 33 experimental sessions, each with 5 “employers” and 5 “workers” were conducted throughout 9 months. Measurement of Beauty The evaluation of all 330 participants’ beauty was based on a 1 through 5 scale (5 being the highest level of physical attractiveness). The evaluators were 50 high school students from Tucuman. All of the high school students were presented with passport like photos of the participants and asked to evaluate. This data was then used to create a variable Beauty which was manipulated to allow for the interpretation of regression coefficients on BEAUTY as the effect of one standard deviation increase in physical attractiveness. This also allowed for the elimination of error in measurement that would arise from the different perceptions of average beauty.
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