Long or Short Capital

Daniel Hamermesh, an econ professor and author, discussed the economics of an ugly boyfriend:

One of the 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.

We have all used this construct before, the “I have this cousin who loves the site Is She Filthy. Does that make him a perv or just a connoisseur?” or “This friend of a friend of mine hooked up with a girl with crabs. What treatment options should I recommend to this friend of friend fellow?”

Daniel Hamermesh, we are so on to you. You can pretend to the uninformed masses that this is just promotion for your book, just some anecdotal externality action, but we know the truth. You have hunkered down with some fine Texas coed(s?) and you want savvy fans to read between the lines. There is a young lady who is so into Dr. Hamermesh, so worked up, she has a poster-sized picture of your ugly mug draping her dorm room wall. You want us to know that this may be your best accomplishment. You even go on to brag about your extra-long education. Women always tell us that it’s not the size of your PhD, it’s the motions in your notions.*

It likely started as something casual. Maybe a little modeling on the side. Perhaps you decided to explore the pareto frontier together. Next thing you know she is hanging a poster of you on the wall and sexting you pictures which visually demonstrate how far her demand curve has shifted out.

Recommendation: The answer is Yes. With impunity. If you doubt me, click through and read the opening sentence that prefaces the quoted excerpt. “Naked self-promotion.” Naked self-promotion indeed you old dog, you!

*Also how much you make.

HT to Economists Do It With Models and to Long or Short’s Twitter

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