Gender-Based Pricing in Consumer Packaged Goods: A Pink Tax?

24 Pages Posted: 12 Jul 2021 Last revised: 15 Mar 2023

See all articles by Sarah Moshary

Sarah Moshary

University of California, Berkeley - Marketing Group

Anna Tuchman

Northwestern - Kellogg

Natasha Bhatia Vajravelu

Cornerstone Research

Date Written: December 16, 2021

Abstract

This paper investigates a controversial application of a textbook pricing practice: gender-based price segmentation, which has allegedly created a pink tax whereby products targeted at women are more expensive than comparable products marketed toward men. Our results shed light on the form and magnitude of gender-based pricing for personal care products. We find that gender segmentation is ubiquitous, as more than 80% of products sold are gendered. Further, we show that segmentation involves product differentiation; there is little overlap in the formulations of men’s and women’s products within the same category. Using a national dataset of grocery, convenience, drugstore, and mass merchandiser sales, we demonstrate that this differentiation sustains large price differences for men’s and women’s products made by the same manufacturer. In an apples-to-apples comparison of women’s and men’s products with similar ingredients, however, we do not find evidence of a systematic price premium for women’s goods: price differences are small, and the women’s variant is less expensive in three out of five categories. Our findings are consistent with the ease of arbitrage in posted price markets where consumer packaged goods are sold. These results call into question the need for and efficacy of recently proposed and enacted pink tax legislation, which mandates price parity for substantially similar gendered products.

Keywords: Price Discrimination, Gender, Pink Tax

JEL Classification: L66, M31, D63

Suggested Citation

Moshary, Sarah and Tuchman, Anna and Vajravelu, Natasha, Gender-Based Pricing in Consumer Packaged Goods: A Pink Tax? (December 16, 2021). Kilts Center at Chicago Booth Marketing Data Center Paper, Available at SSRN: https://ssrn.com/abstract=3882214 or http://dx.doi.org/10.2139/ssrn.3882214

Sarah Moshary (Contact Author)

University of California, Berkeley - Marketing Group ( email )

Haas School of Business
Berkeley, CA 94720
United States

Anna Tuchman

Northwestern - Kellogg ( email )

Kellogg School of Management
2001 Sheridan Rd.
Evanston, IL 60208
United States

Natasha Vajravelu

Cornerstone Research ( email )

181 W Madison Street 43rd Floor
Chicago, IL 60602
United States
2143353065 (Phone)

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