The Pink Tax: Gender Inequalities in Consumption
By: K. Barnes and J. Brounstein
Tl;dr: The “Pink Tax” refers to the hypothesized price premium on women's consumer goods relative to those of men. We advance the first study to rigorously substantiate the existence of the Pink Tax, documenting its magnitude and decomposing the pink tax into its constituent supply and demand components. We find that women pay 4.85% more per unit for goods in the same market than do men. We apply a CES-demand framework to document that women are robustly more-price elastic than are men, indicating that the Pink Tax is not sustained by markups, but through differences in marginal costs of goods consumed, with women purchasing more expensive goods. We also demonstrate that women's consumer goods markets feature a wider variety of UPCs than those of men, suggesting greater competitiveness within women's consumer goods market, further precluding markup channels in generating the observed Pink Tax.