Gender price gaps and competition: Evidence from a correspondence study

Series: Working Papers. 2333.

Author: Margarita Machelett.

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Gender price gaps and competition: Evidence from a correspondence study (4 MB)

Summary

This paper describes a large-scale field experiment conducted in the US auto repair industry to study the existence and structure of gender-based price discrimination in service markets. Women receive price quotes that are 2% (over 10 dollars) higher than those received by men. These differences disappear when women signal low search costs, suggesting statistical rather than taste-based discrimination. Price requests that appear to come from high-income households raise quotes for men but not women, eliminating the gender gap. The price gap also falls with the number of nearby repair shops, suggesting that market competition alleviates gender-based price discrimination.