Bidding for gender equality: How can product purchasers step it up for gender equality?

A recent analysis of over one million eBay transactions has found that women receive, on average, 80 cents in the dollar that men received for selling identical new products, and 97 cents for identical used products. With a focus on International Women’s Day this month, how can product purchasers step it up for gender equality?

Surely the value of a product is determined by the attributes of that product, not the gender of the seller? New research from Science Advances ‘How many cents on the dollar? Women and men in product markets’, suggests that gender does influence the value purchasers attribute to a product – and the price they are prepared to pay. In light of the United Nation’s Sustainable Development Goal – “to achieve gender equality and empower all women and girls” – paying attention to gender equality in the product market – not just the employment sector – will be critical to change.

Aim

Unequal pay in the workplace is a well-documented phenomenon. However, unequal prices in the product market is a relatively unexplored area, with little research to prove (or disprove) the influence of gender product pricing. Acknowledging this gap, Dr Tamar Kricheli-Katz (Tel Aviv University) and Dr Tali Regev (Interdisciplinary Center) conducted a comprehensive study of one of the world’s best known product markets – the world of online selling. The aim of the study was not only to determine whether gender influences price points, but whether online purchasers are highly attuned to subtle gender cues and whether the direction of the gender effect (eg does it consistently increase or decrease price points).

Method

Three separate studies examined whether, and how, gender influenced purchasing behaviours:

  • Study one: eBay auction transactions A study of over one million eBay auction transactions by private sellers in the United States (from 2009-2013) was conducted. The researchers reviewed the 420 most popular products across meta-categories such as clothing, collectibles and computers/tablets in order to test whether gender plays a role in product purchasing. Controls on the type of product sold, seller experience, reputation and listing composition (e.g. photos) were put in place to ensure that gender differences alone could be analysed.

Auction transactions were chosen due to the limited nature of contact between a purchaser and seller, subsequently excluding the impact of different bargaining styles present in other transaction types.

  • Study two: Gender categorisation study Four hundred participants were selected through Amazon Mechanical Turk, an online work marketplace. These participants were used to examine whether online users are able to successfully distinguish the gender of the seller without an explicit declaration of gender on that seller’s profile
  • Study three: Product valuation Separate to the eBay study, the researchers tested whether purchasers would pay more for a $USD100 gift voucher when sold by a man, than when sold by a woman. This hypothesis was tested with 116 participants, using Amazon Mechanical Turk.

Findings

The findings of each study confirmed the researchers’ hypothesis that gender influences product purchasing decisions. The valuation study further proved that this under-valuation is not just limited to eBay transactions, but can be attributed to the U.S. product market more generally.

Specifically, the researchers made findings in relation to (i) gender influenced price points and evaluation of products and the (ii) gender identification of sellers.

  1. Price points: Women received, on average, 80 cents in the dollar that men received for selling identical new products, and 97 cents for identical used products (although the researchers point out, however, that the difference in value of identical used products could be due to the specific conditions of that product). Similar patterns occurred even when the researchers controlled for sentiment in product listings: Women received a smaller number of bids than men; in spite of women having on-average better reputations – or feedback scores – than men (albeit women sellers had on average 9.6 months less experience).
  • Women sellers also exhibited different behaviours to male sellers. For example, through an Ordinary Least Squares (OLS) regression, the researchers found that women chose to set a start price $USD6.47 higher than men.
  • From the purchaser’s perspective, the researchers found a preference for female purchasers to buy products listed by female sellers (effect of 0.01, P < 0.001 n = 260,075). An OLS regression analysis also found that female purchasers paid 3% more than male purchasers at auction.
  • On average, product purchasers attributed a lower average value to identical $USD100 gift cards sold by a woman ($USD83.34) than a man ($USD87.42), reinforcing confirming the findings from the e-bay study.
  1. Gender identification: Product purchasers were able to correctly identify the gender of sellers in the majority of cases (400 participants conducted 2,000 evaluations, of which 1,127 cases were correctly identified, 170 incorrectly identified and 701 cases could not be discerned). Accuracy of gender identification improved in accordance with the number of products sold by that seller.

Implications

This research demonstrates that purchasers are highly sensitised to gender and gender bias – whether conscious or unconscious – plays a significant role in the valuing placed on products. With this result in mind, how can product purchasers step it up for gender equality?

Assuming equity as a goal, and knowing that awareness of bias, by itself, is insufficient to create behavioural change, here are some ideas for people to consider when making purchasing decisions:

  • Accountability: Would individuals/organisations feel comfortable if their product purchasing decisions – in terms of gender bias – were made public? How could they justify paying women less than men for identical products?
  • Transparency: Could real time feedback regarding purchasing activities – in terms of overall gender bias trends – help people to course correct?
  • Rewards: How could the long term benefit of product price equity be rewarded over the short term benefit of an unethical gender biased cost price reduction?

Ultimately, addressing gender inequality in product purchasing behaviours lies with purchasers. This involves a level of conscious thought that may be uncomfortable for some individuals, either because they are not aware of their own biases, or because they are committed to securing a bargain whatever the cost. This study makes those unconscious choices much more transparent and therefore open to scrutiny.

To read the full article, see Tamar Krichell-Katz and Tali Regev, How many cents on the dollar? Women and Men in Product Markets, Science Advances, Vol 2, No. 2 05 February 2016, http://advances.sciencemag.org/content/2/2/e1500599.

For more information, contact Melanie Goudie mgoudie@deloitte.com.au or Juliet Bourke julietbourke@deloitte.com.au.

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