DOES a dollar in my pocket buy more than a
dollar in my wife’s? It seems so, according to a report — much covered
in the US media — released by New York City’s consumer affairs
department just before Christmas.
The report found that men often paid less for clothes and items such as razor blades and shampoo. Even boys’ toys are cheaper than those aimed at girls. The report led with a striking example from a department store website: while a red "My 1st Scooter Sport" cost $24.99, a pink "My 1st Scooter Girls Sparkle" was twice as much. Beneath the paint job, the products appeared to be identical — surely glitter can’t be that expensive?
The sparkly
scooter was sold at an astonishing — but not typical — mark-up. The
report looked at 22 bikes and scooters, finding that on average the
product aimed at girls or women cost 6% more. Across 800 products, while
men sometimes paid more than women, on average, women faced prices that
were 7% higher. This is still a large price difference, but it’s a long
way shy of 100%.
What should we make of this? One response is that perhaps the price gap isn’t really there, or at least not in any systematic way. Perhaps the researchers unwittingly cherry-picked examples — sports cars and Hi-Fi systems were not included.
Whether systematic gender-based pricing is widespread or not, it will always be easy to find examples that look sexist.
Still, other research has reached similar conclusions. For example, a study published in Gender Issues in 2011 by Megan Duesterhaus and others found that "gendered price disparities are not as widespread as ... journalists have previously reported, but it does appear that women pay more for certain goods (deodorant) and services in hair salons (haircuts)".
In the hope of getting a truly comprehensive overview, I spoke to the UK’s Office for National Statistics. Unfortunately, the data are not designed to shed light on this question; they often do not distinguish between male and female products and services. The job of inflation indices, after all, is not to detect discrimination but to follow price changes over time.
So, it is
hard to be sure that gender-based mark-ups are an economy-wide
phenomenon. But they may be. And they certainly seem to exist for
particular kinds of product. Why? No single theory will suffice. Car
insurers and nightclub owners both want to charge men more, but not for
the same reason.
Broadly, there are two types of explanation. One is that higher prices reflect higher costs. Men’s haircuts typically require less time and skill than women’s. It’s said that women’s blouses cost more to clean and iron at a dry-cleaner’s because they are delicate and need to be pressed by hand. Still: why not price haircuts by the hour? Or charge for hand-pressed clothes, regardless of gender? Restaurants do not charge men more on the grounds that they usually eat more; instead, they charge by the dish.
The alternative explanation is that firms make fatter margins on women’s products and services. Economists call this "price discrimination", and it would suggest that women pay more than men if and when they are less sensitive to prices. Perhaps manufacturers and retailers have found that if they try to raise the price of razor blades or shampoo, men will shop elsewhere or skimp on the product, while women will willingly pay the higher price.
This female insensitivity to price — if it really exists — might be driven by all kinds of things. Perhaps women tend to be busier and have less time to shop around. Or perhaps they care more about quality, whereas men just want something cheap.
But even if women are willing to pay extortionate rates for certain goods, it doesn’t mean that firms can exploit that willingness. Many of the businesses accused of sexist pricing — hairdressers, dry cleaners — operate in the face of almost unlimited potential competition.
If all of them operate on razor-thin margins for men and fat margins for women, shouldn’t they be desperately trying to win female customers from each other?
Financial Times
The report found that men often paid less for clothes and items such as razor blades and shampoo. Even boys’ toys are cheaper than those aimed at girls. The report led with a striking example from a department store website: while a red "My 1st Scooter Sport" cost $24.99, a pink "My 1st Scooter Girls Sparkle" was twice as much. Beneath the paint job, the products appeared to be identical — surely glitter can’t be that expensive?
What should we make of this? One response is that perhaps the price gap isn’t really there, or at least not in any systematic way. Perhaps the researchers unwittingly cherry-picked examples — sports cars and Hi-Fi systems were not included.
Whether systematic gender-based pricing is widespread or not, it will always be easy to find examples that look sexist.
Still, other research has reached similar conclusions. For example, a study published in Gender Issues in 2011 by Megan Duesterhaus and others found that "gendered price disparities are not as widespread as ... journalists have previously reported, but it does appear that women pay more for certain goods (deodorant) and services in hair salons (haircuts)".
In the hope of getting a truly comprehensive overview, I spoke to the UK’s Office for National Statistics. Unfortunately, the data are not designed to shed light on this question; they often do not distinguish between male and female products and services. The job of inflation indices, after all, is not to detect discrimination but to follow price changes over time.
Broadly, there are two types of explanation. One is that higher prices reflect higher costs. Men’s haircuts typically require less time and skill than women’s. It’s said that women’s blouses cost more to clean and iron at a dry-cleaner’s because they are delicate and need to be pressed by hand. Still: why not price haircuts by the hour? Or charge for hand-pressed clothes, regardless of gender? Restaurants do not charge men more on the grounds that they usually eat more; instead, they charge by the dish.
The alternative explanation is that firms make fatter margins on women’s products and services. Economists call this "price discrimination", and it would suggest that women pay more than men if and when they are less sensitive to prices. Perhaps manufacturers and retailers have found that if they try to raise the price of razor blades or shampoo, men will shop elsewhere or skimp on the product, while women will willingly pay the higher price.
This female insensitivity to price — if it really exists — might be driven by all kinds of things. Perhaps women tend to be busier and have less time to shop around. Or perhaps they care more about quality, whereas men just want something cheap.
But even if women are willing to pay extortionate rates for certain goods, it doesn’t mean that firms can exploit that willingness. Many of the businesses accused of sexist pricing — hairdressers, dry cleaners — operate in the face of almost unlimited potential competition.
If all of them operate on razor-thin margins for men and fat margins for women, shouldn’t they be desperately trying to win female customers from each other?
Financial Times
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