Wednesday, August 4, 2021
Natasha Bhatia, Sarah Moshary & Anna Tuchman, Investigating the Pink Tax: Evidence Against a Systematic Price Premium for Women in CPG
The pink tax refers to an alleged empirical regularity: that products targeted toward women are more expensive than similar products targeted toward men. This paper leverages a national dataset of grocery, convenience, and mass merchandiser sales, in combination with novel sources on product gender targeting, to provide systematic evidence on price disparities for personal care products targeted at different genders. The results are mixed: while women’s deodorant products are indeed more expensive, on the order of 6%, women’s disposable razors are about 8% less expensive. We then investigate potential drivers of differential pricing with a focus on deodorants. Analysis of wholesale prices indicates that differences in costs cannot fully explain the differences in deodorant retail prices that we document. Rather, our findings suggest that demand for women’s deodorant products is relatively inelastic. We also find a higher share of category TV advertising features women’s products. Finally, we consider the potential welfare effects of price parity regulations.