Published on: 2015-07-29
Research from IEMS’ Christina Jenq was featured in articles from Pacific Standard Magazine, Atlantic Magazine, and Business Insider on the topic of microfinance, and the disproportionately large share of loans given to recipients deemed highly physically attractive.
Excerpt via the July 29, 2015 edition of Pacific Standard Magazine:
“We find that charitable lenders on a large, peer-to-peer online microfinance website appear to favor more attractive, lighter-skinned, and less-obese borrowers,” writes a research team led by the Hong Kong University of Science and Technology’s Christina Jenq, the National University of Singapore’s Jessica Pan, and Walter Theseira, of Nanyang Techological University in Singapore. “We believe lenders are displaying simple prejudice—explicit or implicit—on the basis of borrower physical traits.”
“A one standard deviation increase in assessed attractiveness is associated with a reduction in time to full funding of approximately 11 percent,” the researchers write. Looked at another way, “borrowers who are one standard deviation more attractive are treated by the market as though they were asking for $60 less”—a significant difference, given that the average loan amount is around $700.
Not surprisingly, they found “no evidence that borrower physical characteristics significantly predict loan default.” They also found that this “attractiveness premium” extended to all economic sectors—not just ones such as retail sales, where appearance could conceivably be an asset.
Read the full article here: Need a Loan? Sure, Good Lookin’
Excerpt via the August 3, 2015 edition of Atlantic Magazine:
“After analyzing the tens of thousands of loans made in a single month, the researchers found that Kiva’s users appeared to rely on the physical characteristics visible in profile pictures when choosing a recipient. The discrimination could be quantified: For a loan of $700, the average size on Kiva, the beautiful received the equivalent of a $60 bonus. Recipients who were overweight or had relatively dark skin, on the other hand, would suffer penalties of roughly $65 and $40, respectively. (These bonuses and penalties aren’t insignificant, but the researchers uncovered predictors of funding that were even stronger. In general, fundraisers who were women or from the world’s poorest regions were the quickest to get funded.)”
Read the full article here: How to Succeed in Crowdfunding: Be Thin, White, and Attractive
Excerpt via the August 7, 2015 edition of Business Insider:
The tendency to fund attractive women was more pronounced among less experienced lenders. In other words, lenders’ experience may override some of their biases toward attractive borrowers, possibly because they have a better idea of who is really most and least likely to return their loan.
These findings are supported by other research, which found that minority fundraisers going to door-to-door are significantly less likely to receive contributions — even when they approach a minority household. Similarly, attractive women solicitors receive more and greater donations in door-to-door fundraising experiments.
Read the full article here: Here’s another reason why pretty people may be better off financially
[Bio] Christina Jenq
[IEMS Thought Leadership Brief] The Employment Gender Gap in Urban China: Why Women Benefited Less from China’s Privatization Reforms by Christina Jenq
[IEMS Thought Leadership Brief] Helping Microfinance Fulfill its Promise: Raising Borrower Incomes through Agent-Intermediated Lendinggender, loans, microfinance