“Pink tax” is the term used to refer to the extra amount that women pay for specific products or services, such as shaving razors. Usually the men’s and women’s shaving razor options are almost identical save for the color—but women end up paying as much as 13% more for pink shaving razors than men do for razors marketed to them. The pink tax is not actually a tax, but instead a form of gender-based price discrimination. A 2015 study by the New York City Department of Consumer Affairs compared the prices of over 800 products and found that products for females on average cost seven percent more than comparable products for males.
Manufacturers frequently use specially colored packaging or scents to market personal care products to female customers, but the “pink tax” is not limited to those products; it also is evident in the costs of clothing, children’s toys, and even dry cleaning and car repairs. In 2013, researchers at the National Bureau of Economic Research found that when male and female participants call mechanics, the female callers who seemed uninformed were quoted about $23 more on average than the male callers. Overall, gender specific pricing can cost a woman an estimated $1351 more per year in 1994, according to the New York City Department of Consumer Affairs study (p.6, 15).
The “pink tax” has received more coverage from personal finance companies, such as Bankrate and the Motley Fool, than it has from establishment news media outlets. In February 2020, Microsoft News (MSN) ran an 11-slide feature explaining the pink tax. In 2016, CNBC and the Guardian, among others, published articles based on the New York City Department of Consumer Affairs’ report.
Source: Candice Elliott, “The Pink Tax: What’s the Cost of Being a Female Consumer in 2020?” Listen Money Matters, January 25, 2020, https://www.listenmoneymatters.com/the-pink-tax/.
Student Researcher: Madison Duffy (University of Vermont)
Faculty Advisor: Rob Williams (University of Vermont)