A flurry of news items today in the wake of an analysis of a number of high street retailers which demonstrates that women pay more than men for similar items. Examples include razors, toys and jeans. It seems unlikely that this is due to increased costs of production for the women’s version so as economists we should be analyzing the situation using the idea of price discrimination.
As you may recall in order to be successful a price discriminating firm must be able to split the market into groups of consumers with different price elasticities of demand and charge those with inelastic demand more than those with elastic demand. This would suggest that women have more inelastic demand for a wide range of products than men.
Is there a solution to this? Price discriminators rely on the fact that those paying a higher price cannot choose the cheaper alternative, perhaps for geographical reasons or reasons of time. Therefore, the commuter cannot buy the cheaper off-peak railway ticket because it will mean arriving late for work. However, women may be able to circumvent this. If the ladies’ version of the razor really is the same as the mens’ version, simply made with pink plastic, ladies may be able to dodge the price discrimination by buying the mens’ version.
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