The Pink Tax: Why Do Women Pay More?

Abstract

We evaluate the existence of the pink tax: the hypothesized price premium on women’s consumer goods. Using retail scanner data, we find women pay 5.1% more for consumer packaged goods (CPGs) in the same product-by-location market. When we observe wholesale prices, we find women’s goods feature lower markups. Estimating a constant elasticity of substitution model of demand on the near universe of CPGs and a differentiated products demand model within the disposable razors market yields similar conclusions: the pink tax is not sustained by higher markups, but by women sorting into goods with higher marginal costs and implied quality valuations.

Keywords: gender, price discrimination, discrimination, inequality, markets

JEL Classification: L0, L1, L11, I3, J16