Reading on Price Discrimination

Selected by Seung-gyu Jo

NUS Business School

BEING A WOMAN IN PHILADELPHIA, IT CAN COST YOU

A STUDY FOUND GENDER-BASED BIAS IN PRICING
By Dianna Marder, INQUIRER STAFF WRITER

Philadelphia Inquirer, March 5, 1999

You probably already know that one size does not really fit all. Now, there is confirmation
that one price does not fit all, either - even though state law says it should.
A consumer-advocacy group took to the telephones recently to see whether dry cleaners
and hair salons were complying with a six-year-old state law that prohibits price
discrimination based on gender.
You guessed it. In Philadelphia, women paid a premium at 4 of the 14 dry cleaners and
18 of 22 hair salons that were part of the random survey.
Statewide, PennPIRG found that 90 of 130 hair salons charged women more than men
for a basic shampoo, haircut and blow-dry. Of the 90 dry cleaners it surveyed, 50
charged more to launder women's shirts.
This was the first time compliance has been tested by PennPIRG, the Pennsylvania
Public Interest Research Group, a nonprofit consumer-advocacy group. The report was
released yesterday.
When there is a difference in the price charged to men and women, the law states it
must be for a reason other than gender. A salon, for example, can charge more for
complicated cutting or styling.
But a silk shirt is a silk shirt, no matter who takes it to the cleaners.
For starched shirts on a hanger, the price differences the survey found amounted to
$2.45 at most, said Nicole Beaumont of PennPIRG.
At hair salons, the report found that the difference can be double. Margarita's, in the
1600 block of Spruce Street, charges women $60 and men $30.
``Men come in more frequently, and we don't fuss with their hair with gel and blowdrying,'' said Pilar Papadopoulos, a stylist.
At Julius Scissor, in the 2000 block of Locust Street, men and women pay the same.
There, the price depends on which stylist does the work. The least expensive haircut is
$30, the most is $55.
``Julius feels he spends as much time on men as on women,'' said Donna Alidjani, a
receptionist.
``He looks at it from an artistic perspective.''

Joseph Cutrufello, who manages the Pierre & Carlo salon in the Park Hyatt at the
Bellevue, said
women's hair takes longer and requires more skill. So, he charges based on the stylist's
experience and adds an extra $2 for women's haircuts.
``Yes, I know there's a law,'' Cutrufello said. ``But if it was adhered to, it would put
people out of business. We could charge an even $35 for all haircuts, but we'd then have
to tack on $25 for blowing it dry. One way or another, we have to stay in business.''
Beaumont said the PennPIRG report was spurred by similar studies done in
Massachusetts and California.
In Massachusetts, retailers said women's shirts required hand-pressing because the
shirts did not fit the standard presses used for men's shirts and because the
ornamentation on women's blouses presented problems. That proved false, according to
MassPIRG researchers, who had their women's shirts done on standard presses in 1991.
In California, the surveyors found that gender pricing added up - as much as $1,351
annually for each woman in the state for a total of nearly $15 billion a year more than
men.
Beaumont's group wants legislators to require prices to be posted because that seems
to cut down on problems. PennPIRG encourages people to check prices and stay out of
businesses that break the law.
Enforcement - by the Pennsylvania Human Relations Commission - is lax, said Kathy
Miller, head of the Philadelphia chapter of the National Organization for Women, who
joined Beaumont at yesterday's news conference.
And there is no specific fine. The commission works out a settlement between the shop
and the customer.
Miller wants the commission to get more money for investigations. Beaumont wants a
law establishing fines.
PennPIRG surveyed five other Pennsylvania cities: State College, Scranton, Pittsburgh,
Harrisburg and Allentown.
The results show that State College is the best place to have clothes laundered without
being taken to the proverbial cleaners. None of the eight State College cleaners charged
women more. Scranton was the worst, with 10 of the 15 dry cleaners surveyed charging
more.
Pittsburgh's hair salons had the highest rate of compliance: 10 of 19 had uniform pricing.
The last place a woman might want to have her hair done is Allentown, where 23 of 26
salons surveyed charge women more.
Copyright (c) 1999 The Philadelphia Inquirer