My auto-repair guy knows that I maintain my old minivan well and always ask for a discount. Because I'm a woman, I still may be paying too much for repairs, a new study suggests.
Researchers at Northwestern University's Kellogg School of Management teamed up with AutoMD to find out why customers receive different price quotes when they call an auto-repair shop. In 2012 Meghan Busse, Ayelet Israeli, and Florian Zettelmeyer conducted an experiment where AutoMD's agents called 4,603 auto-repair shops to price a radiator replacement for a 2003 Toyota Camry. The experiment compared three conditions: one where customers indicate they have done research online and know the market rate to replace the radiator; another where customers have no idea how much it should cost; and a third where customers have a too-high price in mind. Not surprisingly, those who thought the repair should cost more than the actual market rate were quoted higher prices than other people. But customers who had done their homework were not offered a lower price than customers who had no clue about what it should cost. Both were offered approximately the market price—at least when the customers were male.
When the researchers broke down their results by gender, they found that women are worse off if they indicate they have no idea what a radiator replacement should cost. Women were offered an average price of $406, while their male counterparts received a quote of $383. Why the difference? One of the study's authors explains:
Repair shops probably do not inherently dislike women or take pleasure in ripping them off. Instead, the data are more consistent with statistical discrimination. Shops believe, righty or wrongly, that women know less about cars and car repair. In the absence of information to the contrary, they will be offered a higher quote. "But when you show that stereotype is wrong"—because you reveal yourself to be an informed woman or an uninformed man—"you get treated the same way," says Busse.
The experiment revealed another gender difference, too. When women request a lower price, they receive a price cut from the repair shop more often than men do—35 percent of the time compared with 25 percent for men. This "pretty sizeable" difference, the authors say, is not explained by higher initial quotes women sometimes receive. Instead, repair shops are surprised perhaps when a woman customer defies the stereotype that women don't haggle and negotiate. They think she will walk out the door; hence, she gets a discount.
The best advice for females in need of a car repair? Do ask and do tell. Women who gather information about the repair's market rate, tell the repair shop they've done their research, and ask for a discount will likely get one. It's easy to imagine employees in male-dominated work environments like car-repair shops succumbing to gender stereotypes. Women who defy stereotype come out ahead.