Back in 2019, Minnesota Attorney General Keith Ellison tweeted:
Haircuts for women are more expensive than for men. And health care, car repair, etc. That’s true for the awesome @AOC and all other women. It is morally wrong and threatens the economic security of women and everyone who depends on their income. “Pink tax”.
What is the “Pink Tax”? Ellison’s hometown newspaper, i Star Tribuneexplained recently:
Women pay thousands of dollars more than men each year for necessities, a cost known as the “pink tax.” The difference is most pronounced among consumer packaged goods: More than 80% are personal care products. they are sexualaccording to a 2023 study that found “significant price differences” between men’s and women’s grocery, convenience, drugstore and retail products from the same manufacturer.
This reveals something mysterious. If, as the authors of the cited study, economists Sarah Moshary, Anna Tuchmanagain Natasha Vajravelu notes, “products aimed at women are more expensive than similar products marketed to men,” as the “pink tax” theory says, why don’t women just buy “comparable” men’s products and avoid paying the tax?
To solve this mystery, Moshary, Tuchmanagain Vajravelu use “national data set for grocery, convenience, drugstore, and mass merchandise sales:” “They found that gender segregation is everywhere, as more than 80% of products sold are gendered.” But most importantly, they also get:
…that classification includes classification of products; there is little overlap in the manufacture of men’s and women’s products in the same category…we show that this difference maintains a large difference in the prices of men’s and women’s products made by the same manufacturer.
In short, the prices of men’s and women’s products are different because they themselves are different. My wife was able to avoid paying the “pink tax” for a haircut by asking for number three on the top and number two on the back and sides. He doesn’t do that.
Indeed:
In an apples-to-apples comparison of women’s and men’s products with the same ingredients, however, we find no evidence of a systematic price premium for women’s clothing: the price difference is small, and the women’s variety costs three out of five times less. categories.
The “pink tax” is a myth.
Moshary, Tuchmanagain Vajravelu concludes that:
These results call into question the necessity and effectiveness of the recently enacted pink tax law, which mandates price parity for products of the same gender.
Indeed they do. That may explain why Attorney General Ellison has been silent on the “pink tax” for the past five years.
“I always tell women and non-binary people: Feel free to buy cheap products that are marketed to men,” Kara Pérez, founder of financial education company Bravely Go, told the newspaper. Star Tribune. That’s sound financial advice, but Moshary, Tuchmanagain Vajravelu’s research shows that it won’t save the cost-conscious consumer an awful lot of money. If those bills are lying on the side of the road, women are smart enough to have picked them up now.
John Phelan is an Economist at the Center of the American Experiment.