Virtual Quant Marketing Seminar - Anna Tuchman

Gender-Based Pricing in Consumer Packaged Goods: A Pink Tax?

Dear All,

Our next Virtual Quant Marketing Seminar is Monday, April 4 at Noon ET. The speaker will be Anna Tuchman.

The zoom link is:
https://mit.zoom.us/j/94690123932?pwd=NjlUeTV0bk9HeTZVYllYY2hXbGhWUT09

Gender-Based Pricing in Consumer Packaged Goods: A Pink Tax? with Sarah Moshary (UChicago – Booth) and Natasha Bhatia (Cornerstone Research)

This paper studies a controversial application of a textbook pricing practice: gender-based price segmentation in CPG, which allegedly has created a pink tax whereby products targeted at women are more expensive than their counterparts marketed toward men. This paper sheds light on the form and magnitude of gender-based pricing for personal care products. We first find that gender segmentation is ubiquitous, as more than 80% of products sold are gendered, and segmentation involves product differentiation; there is little overlap in the ingredients of men’s and women’s products made by the same manufacturer within the same category. Using a national dataset of grocery, convenience, drugstore, and mass merchandiser sales, we show that this differentiation sustains meaningful price differences for men’s and women’s products made by the same manufacturer. However, in an apples-to-apples comparison of women’s and men’s products with similar ingredients, we do not find evidence of a systematic price premium for women’s goods: the women’s variant is less expensive in three out of five categories and what price differences do exist are economically small. Our findings are consistent with the ease of arbitrage in posted price markets where CPG are sold. These results call into question the need for and efficacy of recently proposed and enacted legislation, which mandates price parity across substantially similar gendered products.