Economics of Beauty | Issue 23

Pretty Pays (most of the time)

The beauty industry is expected to be worth 265 billion dollars in 2017. It is easy to assume that makeup is the result of people caving into social pressures to emulate a desired image portrayed in the media. However, a hilarious amount of research has shown that there are economic benefits to being “beautiful.”

Let's get a few things out of the way: the definition of beauty varies between cultures, time periods, and individuals, making it difficult to quantify. There is also the old adage “beauty is in the eye of the beholder.” While beauty is subjective on a case-by-case basis, undeniable trends can be drawn from the data.

Pretty people get a head start from the get go. An article published in Developmental Psychology describes how “cuter” babies got more attention and affection from adults, including their own parents. This bias carries into the classroom. Sociologist Rachel Gordon discusses how more attractive children get slightly better grades and are more likely to get a college degree. 

The genetically blessed are more likely to be considered for a job or get a promotion and to be paid higher on average. This tendency to favour the fetching may stem from perceiving them as more competent, kind, intelligent and trustworthy.

An article in The Journal of Social Psychology describes how attractiveness may be detrimental to women where, ironically, physical appearance is deemed unimportant. According to the article “If an attractive woman is applying for a masculine sex-typed job, for which physical attractiveness is important, then she may not fit in terms of her femininity, but she fits in terms of her attractiveness. If physical appearance is unimportant to the job, an attractive woman would fit less well than if physical appearance were important to the job.” Sorry ladies. 

Most of these differences are slight but they exist and are ubiquitous. The beauty industry is acutely aware of this dynamic and can afford to jack up the prices. This phenomenon is called price elasticity of demand, the degree of sensitivity consumers have to changes in price. Inelastic demand means that despite high prices, consumers will still want to buy the product, in this case beauty products. 

So stop wondering why so many of us put ridiculous amounts of money into the beauty industry. We are simply responding to the economic incentives in place.

This article first appeared in Issue 23, 2016.
Posted 1:41pm Saturday 17th September 2016 by Danielle Pintacasi.