Last week, the Star Tribune carried a story titled “Women’s salaries are lower, and their expenses are higher. Here’s how to push back.” This one article invoked both the “Pink Tax” and the “Gender Wage Gap,” an impressive achievement given that neither actually exists.
The “Pink Tax” myth
The article noted that:
Women pay thousands of dollars more than men each year for necessary items, an expense known as the “pink tax.” The disparity is particularly pronounced among consumer packaged goods: More than 80% of personal care products are gendered, according to a 2023 study that found “large price differences” between men’s and women’s grocery, convenience, drugstore and mass merchandiser products from the same manufacturer.
But I wrote about that very same “2023 study” last year:
A paper by economists Sarah Moshary, Anna Tuchman, and Natasha Bhatia titled ‘Gender-Based Pricing in Consumer Packaged Goods: A Pink Tax?‘:
“…investigates a controversial application of a textbook pricing practice: gender-based price segmentation, which has allegedly created a pink tax whereby products targeted at women are more expensive than comparable products marketed toward men.”
They “find that gender segmentation is ubiquitous, as more than 80% of products sold are gendered, but, crucially, the authors:
“…show that segmentation involves product differentiation; there is little overlap in the formulations of men’s and women’s products within the same category. Using a national dataset of grocery, convenience, drugstore, and mass merchandiser sales, we demonstrate that this differentiation sustains large price differences for men’s and women’s products made by the same manufacturer.”
In short, the prices are different because the products are different.
Furthermore:
“In an apples-to-apples comparison of women’s and men’s products with similar ingredients, however, we do not find evidence of a systematic price premium for women’s goods: price differences are small, and the women’s variant is less expensive in three out of five categories.”
The authors conclude that:
“These results call into question the need for and efficacy of recently proposed and enacted pink tax legislation, which mandates price parity for substantially similar gendered products.”
These findings are not found in the Star Tribune‘s report.
Smart shopping is to be encouraged, but the “pink tax” is a myth.