The Pink Tax is a myth

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Or, rather, it is in much the same way that the gender wage gap is a myth. I’ll provide some context: this article by Anne Perkins is the latest in a wave of pieces expressing latent support for a study released by NYC Consumer Affairs in December. Amongst its findings were that 42% of products available to consumers were targeted at women and more expensive than an equivalent alternative. As a consequence of women deciding to buy these pink products, they are on average $1,351 a year worse off.

Perkins argues that companies price their gender-targeted products differently ‘because they can’ – they are taking advantage of the ‘soft underbelly of exploitation’.

The logic underpinning the campaign seems to involve services and products possessing a sort of objective value – a ‘fair’ price. That companies discriminate between consumer groups in their pricing is evidence that they charge above this price, and therefore exploit their customer base.

Of course, there is no such objective value. The value of a product or service is only what it brings to the consumer, its emotional payout. In this vein, we would expect having a shirt dry cleaned to afford a greater emotional payout to women than to men - this is explained by their willingness to pay for the higher price in the first place. Although in material terms, they are offered identical (or at least very similar) services, the emotional experiences of the groups are different. Madsen provides an excellent account of this theory of value in this Youtube video.

Perkins also neglects to recognise that in return for higher prices on their bottles of shampoo or perfumes, women enjoy a greater range of products to choose from. Supply does tend to equal demand, folks!

The campaign may have some genuinely positive aims: informing consumers that just down the aisle is a near-identical product in different coloured packaging for 30p less can only be a good thing. I myself had no idea that products were priced in this way. Perkins does say that the power to redress the imbalance, should we abhor it as she does, lies in the hands of each and every one of us. I endorse this sentiment.

However, to go a step further than this and use the information as ammunition in the ideological assault on free-markets and to support a demand for government intervention is undoubtedly misled. If we do as Perkins suggests, and outlaw gender price discrimination, then in some cases we will rectify a wrong that could have been solved by easier access to market information. In other cases, we will end up either giving women an especially sweet deal or raising the price to such a level that very few men are willing to pay.