Battle of the Prices: Is It Ever Fair to Charge One Sex More?
On the common practice of charging women more for haircuts and men more for admission to certain nightclubs
I distinctly remembered one Saturday afternoon last year when I went for my haircut with Kino Naoya, my regular guy at the downtown salon at St. Mark’s place I visit two to three times a year. A little sign hung on Kino’s mirror: “Starting next month, all customers will be charged $70 per haircut. Thank you.”
I sighed; Kino had given himself a well-deserved 25 percent raise. But then the economist in me took notice: Gender price discrimination was no more at Kino’s station. I asked him about why he decided to abolish the common pricing practice at hair salons of charging the ladies more than the guys. His reply was that for him, it all took the same amount of time—about 45 minutes. And Kino’s time was getting expensive regardless of whether you were male or female.
This was unusual; salons seem to always charge more for women's haircuts than for men's. Economists call this price discrimination: selling the same thing to two different people at different prices, because one of them is willing to pay more. Hairdressers, along with manicurists, dry cleaners, car and insurance salesmen, and nightclubs often do this. And why not? If one group is willing to pay more than another, charging them more makes business sense.
In some cases, there might be good reason too, in that the service is actually more expensive to provide to one group than to another. Hairdressers may have legitimate claim to charging women more, but only if their cuts require more time, skill, or effort for a more demanding set of customers. In Europe, insurance companies charged women more claiming that because women live longer it's not the same product—the European Court of Justice ruled against this pricing practice, requiring insurance companies to charge both genders the same amount. In the U.S., Obamacare requires health insurers to charge both genders equally. There are women on both sides of this argument, debating what fair and equitable pricing means.
Gender price discrimination is illegal in many states but it can be quite tricky to determine when two products are really the same and when they are different. For example, Miami-Dade County has ordinances that prohibit gender pricing for dry cleaning. The gray area is this: "A business is permitted to charge a different price if the goods or services involve more time, difficulty or cost. In other words, consideration must be given to the quality and complexity of the goods or services to determine whether or not you have been discriminated against."
New York City’s Department of Consumer Affairs (DCA) has stricter ordinances. Inherently biased gender terms, such as shirts and blouses, are not enough—prices can differentiate for shirts with and without ruffles, but not between shirts and blouses. In recent years, the New York DCA has cracked down on gender pricing violations in the city. Inspectors patrol businesses regularly, and in 2012 they handed out 361 notices. Last year, there were 195 violations, and this year’s violation count is already over 200.
Economist and Yale Law School professor Ian Ayres published a landmark study in 1991 showing that Caucasian woman are charged a 40 percent markup compared to Caucasian men at new-car dealerships. Ayres says that as of 2000, there's 43 states that prohibit gendered price discrimination in public accommodations.
"There’s no general federal law prohibiting price discrimination on the basis of gender," says Ayres. "There's the Unruh Act in California which is a matter of state law. There’s an increasing number of states and municipalities that have prohibited gender price discrimination in public accommodations."
So do women always pay more? Not always. Often, nightclubs charge women less for entry, a practice California has banned. Similarly, nail salons often charge men more than women, reportedly because so-called man-icures require more work.
At least a couple men have spoken out against ladies' night: GWU law professor John Banzhaf, and New York lawyer Roy Den Hollander (who has been rightly ridiculed for his comments regarding why he sued: he hates feminists).
Recently I noticed this practice happening for tickets to parties and concerts. The event, the Global Citizen Festival Official Afterparty, charged $20 extra dollars for males. (These practices are clearly designed with a heterosexual clientele in mind.) The ticket link no longer lists the prices, but here's a screenshot:
Christopher Sun, a 27-year-old concert goer who works in marketing, told me that though he knows it's unfair, he thinks it's better than not getting in at all: "I mean, sure it's annoying that they do it like that...I was surprised that they even gave guys the option to buy a ticket. Paying an extra $20 to guarantee entry is a much more attractive option than playing Russian (bouncer) Roulette at the door and risk being denied completely."
Sun's friend Hailey Brooks says it's the first time she's seen this kind of pricing: "It’s a pretty common double standard in nightlife, girls get into clubs more easily and sometimes don’t have to pay cover at all or get free drink tickets. However, this was the first time i’d seen ticket prices adjusted by gender. I feel bad for my guy friends that would pay more, and it just comes across as a very dated ticketing idea, and doesn’t seem to fit with EDM shows in general."
"It's a necessary evil," says Sun. "If you ask your average club dude, nine times out of 10, they'll say they don't mind paying a little extra ($5-20) if it guarantees a dance floor full of girls and/or a good ratio."
The clubs seem to agree. I reached out to Marquee, one of the most profitable names in the nightclub business. The club is so successful it was the topic of a Harvard Business School study. Marquee New York's presales charges $0 to $10 more for male tickets. A spokesperson for the club sent this statement:
We use presale as a way of giving fans of these DJs the best experience possible. Ticket prices start low to make sure there are true fans in the room, the fans that will buy months in advance. Those are the people that carry the energy throughout the entire night on the dance floor and it's important they are in attendance. The party feeds off that energy and produces a great atmosphere inside the club. We look to encourage equal gender attendance at our venues.
Ayres puts it this way: "These [price] differences are trying to gender balance the events for dating purposes." Ayres says that with commodities—such as his study where new cars were sold to men and women at different prices—it's a "clear wrong." Though he says in the case of clubs charging different prices, it's worth asking if the dating, or any other, purpose really justifies the gender price discrimination.
While some women and men might want to hold onto arrangements that benefit them—whether it's ladies night or cheaper cars and insurance—ultimately staying away from places that gender price discriminate in either direction is what feels right to me. I just think about how infuriating it is when a dry cleaner wants to charge more because I'm a woman, and it's enough for me to give up that free drink at ladies' night.