Monday, Nov 3
Melvin Stephens, Estimating Program Benefits
Arunachalam, Raj, and M. Shah. 2012. "The Prostitute's Allure: The Return to Beauty in Commercial Sex Work." B E Journal of Economic Analysis & Policy, 12(1).
We estimate the earnings premium for beauty in an occupation where returns to physical attractiveness are likely to be important: commercial sex work. Using data from sex workers in Ecuador and Mexico, we find that a one standard deviation increase in attractiveness yields 10-15 percent higher earnings. Including controls for personal characteristics (communication ability and desirability of personality) cuts the beauty premium by up to one-half. Beautiful sex workers earn higher wages, have more clients, and enjoy a larger compensating differential for disease risk.