The new science of physiognomy

Tue Mar 10 20:49:53 CDT 2009

ABOUT FACE
Mar 5th 2009  

People's creditworthiness, it seems, can be seen in their looks

SCIENCE proceeds by trial and error. The successes are trumpeted. The
errors are often regarded with embarrassment by subsequent generations,
and locked away in attic rooms of the subject's mansion like mad
relatives in a Victorian novel. Usually, they stay there. Craniology,
phrenology and eugenics, once-respectable fields of endeavour that are
now regarded with a shudder, may shriek from time to time, but few sane
people pay attention to them. One, however, has escaped recently, and
is trying to rehabilitate itself. For years physiognomy--the idea that
a person's face is a reflection of his character--was sneered at. Now,
it is making a come back.

Appearances certainly count. Women, for instance, judge men by their
faces. Testosterone levels are reflected in the face, and who is seen
as a one-night stand and who as a potential husband depends in part on
this physical feature. Similarly, a male face betrays the owner's
underlying aggressiveness and even his business acumen. Facial beauty
in either sex is also associated with higher incomes. The latest
research, though, cuts to the moral quick. For Jefferson Duarte of Rice
University in Houston, Texas, and his colleagues are suggesting that
one of a person's most telling moral features, his creditworthiness,
can also be seen in his face.

Dr Duarte's research was enabled by the internet. Once, if you wanted
to borrow money, you had either to visit a bank or to tap a rich friend
or relative. Now it is possible to do business directly with a
stranger, using a peer-to-peer lending site. The needy advertise
themselves, and how much they want. Those flush with cash assess
potential borrowers and decide who to lend to, and at what rate of
interest. 

The borrowers themselves have to disclose their financial positions,
credit histories, jobs and education. Often, though this is not
required, they also post photographs of themselves. That means it might
be possible to assess the effects of appearance on the outcome. And the
process is an open auction, which means that all offers, acceptances
and rejections are in the public domain.

For his research, Dr Duarte chose a site called Prosper.com. His
intention was twofold: to see if physiognomy-based prejudices about
creditworthiness existed and, if they did, whether they were justified.
To do so he used another peer-to-peer website to subcontract the job of
assessing creditworthiness to a number of ordinary people. The site in
question (which is run by Amazon) is called Mechanical Turk. In this
case the people it matches are those who have a task that needs doing,
and those willing to perform it. 

PEER REVIEW
The team recruited 25 Mechanical Turk workers and asked them to assess
pictures of potential borrowers that had been posted on Prosper.com. In
particular, they were asked to rate, on a scale of one to five, how
trustworthy these people looked, and to estimate the percentage
probability that each individual would repay a $100 loan. They were
also asked to make several other assessments, such as the individual's
sex, race, age, attractiveness and obesity. The 25 results for each
photograph were then averaged and analysed.

The researchers looked at 6,821 loan applications, 733 of which were
successful. Their first finding was that the assessments of
trustworthiness, and of likelihood to repay a loan, that were made by
Mechanical Turk workers did indeed correlate with potential borrowers'
credit ratings based on their credit history. That continued to be so
when the other variables, from beauty to race to obesity, were
controlled for statistically. Shifty physiognomy, it seems, is
independent of these things. 

That shiftiness was also recognised by those whose money was actually
at stake. People flagged as untrustworthy by the Mechanical Turks were
less likely than others to be offered a loan at all. To have the same
chance of getting one as those deemed most trustworthy they were
required to pay an interest rate that was, on average, 1.82 percentage
points higher, even when the effects of historical creditworthiness
were statistically eliminated.

For trustworthiness, then, physiognomy works. Unfortunately, Dr
Duarte's method was not designed to find out which features label
someone as trustworthy. But credit-rating agencies are no doubt working
on that question even now.

See this article with graphics and related items at http://www.economist.com/science/displaystory.cfm?story_id=13226709

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