My dry cleaner charges $1.65 to clean and press a man's shirt and $5.25 for a woman's blouse. What's going on here?
The laws of arithmetic allow only two possibilities. Women's clothing must be associated either with higher costs or with higher profit margins for the dry cleaner. Unfortunately, neither theory seems terribly plausible.
Let's start with the "higher cost" theory. In its most naive form, this theory predicts that if I move the buttons on my dress shirts from the right side to the left, the cost of laundering them will more than triple. That one's not going to fly. So, to give the theory a fair chance, we have to look for more significant differences between men's and women's clothing.
Well, like what? You could argue that women's clothing is typically made of more delicate fabrics than men's. But if that's the relevant factor, why don't dry cleaners just quote different prices for different fabrics? (For some materials, such as silk, they typically do quote separate prices. The question is why this practice does not completely displace that of distinguishing between men's clothes and women's.)
An alternative version of the theory is that women's clothes are costlier to process because women demand higher quality work. I can't disprove that version, but I have no real evidence to support it, either. So, in a search for better alternatives, I called three different dry cleaners and asked for their explanations. The first said that men's shirts are machine pressed, while women's are hand pressed. That left me wondering why they don't simply quote different prices for different kinds of pressing. The second said that women's shirts require specialized treatment because they are typically doused with perfume. That left me wondering why men who use after-shave are not chronically dissatisfied with their dry cleaners. The third said that this was their pricing policy, and if I didn't like it, I was free to shop elsewhere.
In the absence of a clear, convincing story about gender-specific costs, let's see what kind of story we can tell about gender-specific profit margins. In other words, let's ask whether my dry cleaner is exploiting female customers through higher markups.
To make sense of that theory, you have to ask why dry cleaners would want to discriminate specifically against women, as opposed to, say, men. That strategy makes sense only if men are more price-sensitive than women and hence more likely to walk away in the face of a high markup. But why should men be more price-sensitive? You could argue that men are less diligent about cleanliness and so more likely to respond to high prices by wearing unlaundered shirts. But as long as we're dealing in stereotypes, you could argue equally well that women are more willing to do their own laundry--in which case women would be more likely to walk away from a high price, and it would make more sense to discriminate against men.
So it isn't clear which gender is the more natural candidate for getting soaked at the cleaners. But there's a more fundamental reason to doubt that either gender can be victimized by price discrimination, and here it is: There are over half a dozen dry cleaners within easy walking distance of my house. If they're all earning higher profits on women's blouses than on men's shirts, why hasn't any of them decided to specialize in women's blouses?
Let me make that more concrete. Suppose the going prices are $1.65 for a man's shirt and $5.25 for a woman's blouse, even though (under the theory we're currently entertaining) they are equally expensive for the cleaner to handle. Then if I were a dry cleaner, I would announce a uniform price of $5 for all shirts and blouses--thereby attracting all the women's business and none of the men's. Because nobody has adopted that obvious strategy, we should suspect that despite appearances, the profit margin on women's clothing can't be much higher than on men's.
In fact, the process wouldn't stop there. As soon as I announced a uniform price of $5, my neighbor would announce a price of $4.75. Ongoing competition for the (temporarily) more lucrative women's business would quickly eliminate any profit differential.