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21 May 2019

Women Pay More for Repair

Auto-repair shops are more likely to overcharge uninformed female shoppers than equally clueless men, according to new research published by the National Bureau of Economic Research

Researchers from the Kellogg School of Management at Northwestern University in the US studied the effect of gender and price expectations on auto-repair estimates. In the experiment, women and men telephoned garages to find out the cost of replacing a radiator in a 6-cylinder 2003 Toyota Camry LE.

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The callers, using three different scripts, collected 4,603 price quotes from 2,778 shops over 16 weeks. In one script, the caller was well-informed, citing an expected fee of $365 that matched the market rate. In another script, the caller mentioned an estimate of $510—above the market price. The third version made clear that the caller wasn't familiar with the situation. It read, “I have no idea how much it is to replace a radiator. Could you tell me how much you charge?”

Researchers found that men and women who demonstrated no familiarity with the average market price or stated a higher-than-market-price expectation received much higher quotes than those who displayed knowledge. But women who said they had “no idea” what to expect received a higher quote than men who said the same thing.

It seems that shops assume that a man, on average, is more likely to figure out if it’s a fair price than a woman as the general stereotype is that men know more about cars than women do.

Men and women who specified a price quote received the same type of estimates—whether high or low, based on their expectations. “In short, shops appear to respond to whatever information they have about consumers’ price knowledge, drawing inferences from gender if that is all they have to go on, but disregarding gender if provided more direct information about consumers’ price expectations,” the researchers wrote.

Researchers also had the callers ask for a price discount if the shop’s quote was higher than they expected. In general, haggling proved worthwhile. On average, if the caller asked, shops lowered the price by 13% from the original quote for both women and men. Women were more likely by 10 percentage points to get a break on pricing.


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