When Beauty Doesn't Pay: Gender and Beauty Biases in a Peer-to-Peer Loan Market

We analyzed a random sample of individual listings from an online market for peer-to-peer lending to examine the effects of gender and attractiveness on receiving loans. In this setting, we tested the theoretical argument that women are penalized for violating beliefs about women's social roles when they seek loans for male-typed endeavors, such as running a business. Consistent with this theory, female borrowers seeking loans for business purposes were less likely to receive funding. Surprisingly, women's facial attractiveness moderated this effect: women seeking business loans were even less likely to receive funding if they were attractive. This result qualifies the conventional notion of beauty as a diffuse asset and underscores the alternative idea that beauty may accentuate perceived femininity and thus exacerbate the disadvantages that women face in male-typed domains. Overall, our research shows that gender beliefs about task-relevant competence can carry over from more formalized organizational contexts into new forms of online transactions that are designed to reduce biases that result from face-to-face interactions.