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The Economy Looms Larger Than It Used to in Shoppers’ DecisionsAre Women Charged a ‘Pink Tax’ on Personal-Care Products?
- By
- April 11, 2022
- CBR - Gender Gap
US shoppers wandering into the personal-hygiene aisles at grocery stores and pharmacies face a dizzying array of options for shaving cream, shampoo, deodorant, and other products. Among their choices is whether to buy something aimed at men or at women, a distinction that’s often made with pink or blue packaging even though the ingredients may be similar.
For years, lawmakers and consumer advocates have argued that companies charge higher prices for women’s products than nearly identical offerings for men. A 2015 survey by the New York City Department of Consumer Affairs put this “pink tax” at 13 percent, inspiring persistent legislative efforts at the state and federal levels to make it illegal.
But the pink tax may not exist, according to Chicago Booth’s Sarah Moshary, Northwestern’s Anna Tuchman, and Cornerstone Research’s Natasha Bhatia. They put the NYC DCA’s conclusions to the test nationwide using the NielsenIQ data sets at Chicago Booth’s Kilts Center for Marketing—and find them wanting.
“When we pushed a little further and did an apples-to-apples comparison of products that were substantially similar—they had the same first few leading ingredients or the same active ingredients—in many categories, women’s products had a slightly lower price,” Moshary says.
The findings suggest that legislation intended to end gender-based price differences would have little benefit for women’s wallets. Since 2015, US representative Jackie Speier (Democrat of California) has been pushing a federal measure that would ban the sale of “substantially similar goods or services” marketed and priced differently for men and women. California enacted the Gender Tax Repeal Act of 1995 and New York banned the pink tax in its 2020 budget bill.
Mixed bag
While some personal-care items for women are priced higher than those for men, other products sell for less, even ones made by the same manufacturer and with the same leading ingredients.
“The way that policy makers are currently conceiving the pink tax—that women are being charged higher prices for substantially similar products—we don’t find evidence to support that,” Moshary says. “If there are constraints on what policy makers spend their energy on, this law is going to be relatively low impact.”
The researchers used NielsenIQ Retail Scanner Data to track almost 40,000 US retail stores from 2015 to 2018. They studied products in nine personal-care categories: bar soap, body wash, deodorant, disposable razors, hair dye, nondisposable razors, shampoo, razor blades, and shaving cream.
They find that consumers faced higher prices for women’s bar soap, body wash, deodorant, and razor blades, while they faced higher prices for men’s hair dye, razors, and shaving cream. Without adjusting for various attributes, they find that prices for women’s products per unit were higher than for men’s products; but, after making those adjustments and comparing products that shared the same main ingredients, they find that “the pink tax is negative, as women’s products are 2.2 percent less expensive per unit.”
“When you’re actually looking at men’s or women’s products that are similar—not exactly the same, but at least the first few ingredients are the same—the price differences are much smaller,” Moshary says.
She acknowledges that the findings raise more questions about gender-targeted products. “We’re interested in trying to better understand what drives these differences in characteristics of products that are targeted at men or women,” she says. “We’re also interested in whether there are differences over time in the share of unisex products.”
As for legislation to repeal the pink tax, “our finding that women’s personal care products are not systematically more expensive calls into question the role of government intervention,” the researchers write.
Sarah Moshary, Anna Tuchman, and Natasha Bhatia, “Investigating the Pink Tax: Evidence against a Systematic Price Premium for Women in CPG,” Working paper, December 2021.
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