If you’re a woman, you might pay thousands of dollars more than men over your lifetime to purchase similar products. A widely publicized December 2015 study of gender pricing in New York City looked at the prices of 794 products from 91 brands in 35 product categories at 24 stores. It found that overall, women’s products cost 7% more than similar men’s products. The study covered items from all stages of the life cycle, from children’s toys to senior home and healthcare products.
The researchers found that products for female consumers were likely to cost more in every industry, and overall, men were paying more than women 18% of the time, while women were paying more than men 42% of the time and prices were equal 40% of the time. Some researchers have dubbed this pervasive overcharge of women the “pink tax.”
How Women Pay More Than Men
A random sample of the study’s average price difference findings reveals:
- Girls’ jeans cost $1.80 more than boys’
- Girls’ underwear costs $0.50 less than boys’
- Girls’ sports helmets and pads cost $2.90 more than boys’
- Women’s jeans cost $5.66 more than men’s
- Women’s underwear costs $2.44 less than men’s
- Women’s shampoo and conditioner costs $2.71 more than men’s
- Women’s shaving cream costs $0.16 less than men’s
- Canes marketed to women cost $2.33 more than canes marketed to men
- Digestive health products marketed to women cost $0.43 less than those marketed to men
Women’s Goods Have Higher Tariffs Than Men’s Goods
Tariffs also affect how much women pay. Tariffs on certain goods, such as apparel and footwear, vary based on the gender of the consumer for whom the product was created. Many goods have no gender-based tariff difference, but some goods have large differences. And while women’s goods do not have higher tariffs across the board, they do have higher tariffs overall.
A study published by Texas A&M University’s Mosbacher Institute, which focuses on trade, economics and public policy, found that women pay higher tariffs than men for wool jackets, silk shirts, cotton suits, suit jackets and blazers, leather shoes and golf shoes. Men pay a higher tariff than women on cotton shirts, wool suits, swimwear and synthetic fiber suits.
(Not all news about women’s financial equality is bad. Read 10 Jobs Where Women Earn More Than Men and 10 Most Successful Women Entrepreneurs of the Decade.)
Arguments that Challenge the Pink Tax Concept
Not everyone thinks that the pink tax is real despite the studies that seem to prove its existence and the laws that have been passed in an attempt to combat it. The skeptics have three key arguments against it.
1. Women’s goods and men’s goods are different, even when they seem the same.
California, Vermont and other states have laws against discriminatory pricing based on gender. California’s law prohibiting merchants from charging women more than men for haircuts, dry cleaning, alterations, car repairs and other services (but not products) went into effect Jan. 1, 1996. The law was designed to require merchants to charge women and men the same prices for services that required the same time, cost and skill level to provide. Likewise, Vermont’s longstanding Public Accommodations Act and Consumer Protection Act makes gender-based pricing illegal.
A recent Vermont report on gender-based pricing reminds retailers and service providers that they can account for legitimate differences when setting prices. With haircuts, for example, they can charge based on time, hair length, cut complexity, blow drying, styling, coloring and stylist experience. Dry cleaners can charge different prices based on whether an item is hand ironed or machine pressed, whether it contains darts or not, or whether starch is required or not. But stores cannot simply charge different prices for men’s haircuts and women’s haircuts or men’s clothing versus women’s clothing. They must use gender-neutral factors to set a price.
2. The laws of economics prevent price discrimination.
Some economists argue that retailers and service providers cannot truly charge women more for an identical product because if they did, competing firms trying to get in on those profits would increase the supply and drive prices down.
No one is forced to pay a specific price for a specific item, and “in an unhampered market there are no correct or incorrect prices. There are only the prices that people freely choose to pay,” writes University of Georgia student John Dotson for the Mises Institute, a libertarian think tank based in Auburn, Ala.
3. Women are smart and free to choose.
Perhaps similar products marketed to men and to women actually do have noticeable differences that women are willing to pay more for.
“By continuing to buy differently priced goods for men and women, the consumers have indicated that they think there is nothing wrong with there being price differentials between men’s and women’s products . . . If the two different products were truly the same, then women would simply buy the male version of the products,” Dotson writes.
Associate editor Elizabeth Nolan Brown, writing for Reason magazine (an arm of the Reason Foundation, a free-market think tank based in Los Angeles), also argues that women perceive the differences and choose to pay more when they have the option to pay less to buy the men’s version.
“One can jump to one of two conclusions: Either women are so brainwashed by marketing that they choose products against their own best interests because of it, or women find some discernible appeal in the women's products – be that different ingredients, cosmetic factors, or whatever else – that make them worth paying more for. I'm going to go with the explanation that grants women a little intelligence and agency,” Brown writes. (For related reading, see 5 Ways to Become a Financially Savvy Woman and How Do Women Compete in a Man’s World?)
The New York City study, however, argues that “though there may be legitimate drivers behind some portion of the price discrepancies unearthed in this study, these higher prices are mostly unavoidable for women. Individual consumers do not have control over the textiles or ingredients used in the products marketed to them and must make purchasing choices based only on what is available in the marketplace. As such, choices made by manufacturers and retailers result in a greater financial burden for female consumers than for male consumers.”
Dotson, however, writes that legislation requiring companies to charge equal prices for men’s and women’s products would equate to price control and lead to negative outcomes such as producers exiting the market and a decrease in supply and choice for consumers.
The Bottom Line
If women really are paying more than men for nearly identical products and services on top of earning less for the same work, they will have a harder time economically throughout their lives, whether with short-term goals like getting all the bills paid for the month or with long-term goals like saving for retirement.
While any discrepancies might average out at the household level for women who have combined their finances with men, women who are single or who are in relationships with other women lack such a safety net. (For further reading, see Why Women Retire with Less Money and Retirement Planning for Women: Overcoming the Gender Pay Gap.)