Women pay more than men for similar items: an example of price discrimination?

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.

Read the full story here:

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/12107244/Women-charged-twice-as-much-as-men-for-identical-items.html

 

 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s