Institute Of Economic Affairs: The ‘Gender Tax’ Story Doesn’t Show What Feminists Think It Shows

By Ryan Bourne: The Times has a front-page lead today investigating differential pricing for similar functioning products branded towards men and women (sadly, another direct import from US debates). Some examples:

• ‘At Argos, identical children’s scooters are £5 more expensive in pink than in blue…’
• ‘Levi’s 501 jeans for women are on average 46 per cent more expensive than the men’s version, even if they have the same waist and leg length…’
• ‘Standard razors for women tended to cost 49 per cent more than the equivalent for men. Tesco sells five own-brand “female twin-blade disposable razors” for £1. For the same price men get ten of an almost identical product, except that the razors are blue.’
• ‘Amazon sells a Playmobil pirates ship for £12.59. The equivalent “fairy queen” ship costs £14.99.’ 

Predictably, the Fawcett Society has described this as a ‘sexist surcharge’ – implying overt, and almost coercive discrimination. Maria Miller perhaps gets closer to the real source of the outrage when she says: ‘At a time when we should be moving towards a more de-gendered society, retailers are out of step with public opinion.’
Here’s three things to bear in mind with this story:

1. The products aren’t ‘the same’. Yes, razors have the same functional use whether they are for men and women, but part of a product is its branding and design. Don’t believe me? Look at different brands of baked beans. On clothes, past explanations for this sort of differential pricing have been that men’s clothes tend to be more standardised, whereas women’s “are far more varied — sleeveless, rayon, cap-sleeved, buttoned, silk, pullover — and can't all be handled the same”.
2. This is voluntary exchange, suggesting that women are less price responsive than men. Women are not forced to buy these products. They freely choose to do so. That many do suggests that, on average, they are more price inelastic than men – i.e. less responsive to changes in prices. This throws up an interesting sociological question. Maria Miller would have us believe that public opinion is overwhelmingly in favour of a de-gendered society. Many people may indeed state this. But this is clear evidence that when they vote with their wallets, they overwhelmingly value the products tailored to their gender, regardless of their higher price. Now, many feminists would put this down to social norms and conditioning, but it could not be clearer that it is Maria Miller who is out of touch with public opinion expressed through people’s revealed preferences right now.
3. A product is worth what people are willing to pay for it in exchange, not some function of the cost to make it. This debate risks entrenching the idea that product prices should be linked solely to costs of production – a variant of the old ‘labour theory of value’. In fact, value is subjective to the individual contemplating the objective, not the functions or characteristics of the product itself. That is why there are so many gains from trade - exchange takes place each participant values what the other person has more than they value what they are offering. The key question then, I guess, is why do many women value these gender targeted products so highly? I’m not best placed to answer that, but some have suggested that there is a higher payoff to women of conforming to trends or ‘belonging to you gender’.

Once again, real people confound the academics and the politicians. Women seem to respond to brands and so-called ‘gendered products’. They decide to buy them, even if their self-appointed superiors think they should not. It is not the market that is somehow failing but politicians who do not understand how real people behave.

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