Despite the controversy surrounding the Pink Tax, state legislatures have proposed laws prohibiting discriminatory gender pricing.
The “pink tax” refers to the assumption that products marketed to women are more expensive than those sold to men, resulting in an estimated average of $1,350 more in annual spending.
A recent study by the Kellogg School of Management at Northwestern University explored the reasons behind the “pink tax” and why products marketed to women tend to have a higher price range, leading to unexpected results.
Pink Tax Products
The study researched discriminatory gender pricing within the industry of personal care products, where gender differentiation is most prominent.
The co-authors of the study, Anna Tuchman, Sarah Moshary, and Natasha Bhatia, revealed that there were “no significant price differences between comparable products aimed at women and men.”
Instead, the results exposed a more difficult topic to tackle – the difference in product marketing for men and women.
“We find that when firms sell products targeted to men and women, they’re rarely identical products that are sold in different colored packaging,” said Tuchman.
“The prices charged for products targeted to men and women differ, but it seems to be driven by the fact that the products themselves are different,” she added.
Price of the Personal Care Industry
Based on a study of 3 years of data from nearly 40,000 stores in the U.S., focusing on products such as body wash, deodorant, bar soap, hair dye, razor blades, and more, the difference in prices in personal care products is based on the included ingredients, and not a “pink tax.”
Tuchman notes that moisturizer is used in most personal care products marketed to women, yet it is not an ingredient in most personal care products for men.
According to the Kellog study, households would save more money annually if switching to products with different formulations.
“The average household would save less than 1 percent by switching to comparable products targeted to a different gender. The proposed savings would be larger—close to 10 percent—of households switched to products with different gender targeting that also have different formulations,” states the study.
Although research shows that the “pink tax” is not what it seems, the advertising industry markets a wider range of products to men than women.
“The basket of goods is just larger for women,” concludes Tachman.