The cost of being a female consumer

Guha Neogi, Reeti

Many of us are familiar with the concept of the gender pay gap, which refers to the fact that men generally earn more than women. The common statistic shows that women earn only $0.79 for every $1 that men earn. However, this statistic only presents part of the issue. Another form of discrimination is price discrimination. Women frequently encounter financial obstacles such as being charged more for certain goods, which is commonly known as the "pink tax." If you’re a woman and a consumer, you must have paid the “pink tax” at some point in your life.

For instance, in drug stores, you can find inexpensive razors that have only one blade and lack fancy features such as a moisturising strip or rust-free titanium. These razors come in two versions: a blue one marketed as men's and a pink one marketed as women's. The only difference between them is their colour, yet the women's version is typically more expensive than the men's. This is precisely the price discrimination we are talking about. What is this Pink Tax? The pink tax refers to the tendency for products marketed specifically toward women to be more expensive than those marketed toward men. Multiple academic studies, government research and women going about their daily lives have often encountered products marketed towards women that cost more than the nearly identical product designed for men –and we can not really say vice versa.

How does the Pink Tax Work?

The pink tax is not a tax in the literal sense. It refers to how women pay more for the same, or similar, products and services than men. Gender-based price disparities are prevalent in several sectors, but one of the most visible is personal care products. These include, for example, soaps, lotions, razor blades and deodorants that are marketed specifically to either women or men. Apparel, such as a pair of jeans, or services like a haircut, are a few common examples. Children's toys marketed to girls are another example.

Does the Pink Tax still exist?

It certainly does. While the pink tax is not an actual tax, it still exists. A few governments have provisions to prohibit price discrimination based on gender, but there is no concrete law against this gender-based price discrimination. Let’s take a look at some statistics. In the United States, The New York City Department of Consumer Affairs analysed 800  gender-specific products from nearly 100 brands. The report found that, on average, personal care products targeted to women were 13% more expensive than similar men’s products. Accessories and adult clothing were 7% and 8% more expensive, respectively. Children’s clothing was 4% more and 8% more for senior/home health care products. The study concluded that "women are paying thousands of dollars more over the course of their lives to purchase similar products as men." Another US study found that dry cleaning prices for women’s dress shirts were almost 90% more expensive than for men’s shirts.

The possible reasons for this higher price of women’s products could be, as per some independent research, higher import tariff on women products. Clothing companies pay higher import tariffs on women’s items—such as silk shirts, wool jackets, cotton suits, suit jackets, blazers, leather shoes, and golf shoes. Clothing companies balance this out by increasing the price of the item with the higher import tariff, which may result in a  gender-based price difference that is actually based on the item’s cost.

Furthermore, different marketing strategies are at play. The companies create an “exclusivity” for women's products via the colour, the material, the smell or the purpose of the product. Thus compelling female consumers to feel the need to buy such products in order to escape the FOMO. Such strategies are extensively used by firms to multiple their profits by many-folds. We’re all guilty of falling into such traps. Advocates of women’s rights have long worked to lower or eliminate taxes on tampons and other feminine sanitary products, considering the wage gap and recognizing the burden they place on women, especially those on lower-incomes. Several countries including Australia, Canada, India, and Rwanda, among others have eliminated taxes on tampons and other feminine products. There is still a very long way to go but this is definitely a start.

Where does it leave us?

The pink tax may not be an actual tax. But hundreds of products marketed toward women end up costing more than nearly identical products targeted toward men. Evidence of gendered price discrimination clearly exists, even if there is room to debate why such a tax even exists or how serious or costly of a problem it really is.

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