May 2012

No. 6579: Tall or Taller, Pretty or Prettier: Is Discrimination Absolute or Relative?

published in: IZA Journal of Labor Economics, 2012, 1:2

Using several microeconomic data sets from the United States and the Netherlands, and the examples of height and beauty, this study examines whether: 1) Absolute or relative differences in a characteristic are what affect labor-market and other outcomes; and 2) The effects of a characteristic change when all agents acquire more of it – become taller or better-looking. Confronted with a choice among individuals, decision-makers respond more to absolute than to relative differences among them. Also, an increase in the mean of a characteristic's distribution does not alter market responses to differences in it.