There is a growing body of research that finds taller people earn more than their shorter colleagues, especially among men.
Andrew Leigh, an economist at the Australian National University, has found that being six feet tall raises annual income by almost $1,000, compared with men two inches shorter.
A similar observation was first made by Timothy Judge, a management professor at the University of Florida. When corrected for variables such as age, gender and weight, an inch of height is worth almost $800 a year in salary, Judge estimates. This may be because tall people in today’s society have greater self-esteem and social confidence than shorter people, Judge believes.
If this is the case, he adds, people may be more likely to apply such subconscious appraisals to men rather than women.
Either way, the biggest link between height and salary seems to appear in sales and marketing positions — careers in which customer perception generally has a major impact on success.
Adding to this research, Alok Kumar, a finance professor at the McCombs School of Business at the University of Texas, recently completed a study that suggests that height can also be a predictor of how individuals manage their money.
In fact, the effect of height on our financial decisions is second only to actual wealth, Kumar suggests: “It is known that wealthier people will hold riskier assets and take more chances. Some have thought that after wealth, age or education would be the next-best predictor. Height, however, beats all of those.”
Kumar’s paper, which uses data from the U.S. as well as several European countries, finds the tendency to participate in the stock market is about 15% higher for tall individuals.
Using a standardized measure for height in each country they studied, Kumar also found that when tall people do take part in the stock market, they tend to pick riskier securities — although Kumar describes these investors as “judicious” risk-takers.
Two other findings from Kumar’s paper are noteworthy: the risk effect is less pronounced for tall women; and it gets reversed almost completely for those who are very tall.
Rather than being a single predictor of behaviour, Kumar suggests, height is essentially a proxy for all of the other life experiences that individuals expect to have if they are taller than average.
“For example, someone pats you on the back as a child, offering reinforcement,” he says. “These small things can lead to better self-confidence, self-esteem — all the things that are associated with being tall.”
Kumar sees this study — along with his previous research about how age, religion, and gambling habits drive investor behaviour — as playing a key role in understanding how individuals choose stocks. He believes that if your clients are more aware of their biases, both they and you might be able to counterbalance these biases.
“For example,” Kumar says, “if I’m taller, maybe I should recognize that I might be taking more risks.” IE