NEW YORK CITY is cracking down on discrimination:

At Kim's Holly Salon in Crown Heights, manicures for men were $8 while women paid $6.

At Freckle Skin and Hair in Greenpoint, haircuts for men used to be a good $10 cheaper than for women.

And until recently, a wax at Vanilla Hair Spa on the Upper East Side was priced differently for men and women.

No more.


Many services, from dry-cleaning to insurance, charge you a price based on your gender. Is that unfair discrimination or good economics? Arguably the firms fined (nail salons and dry-cleaners) are in near perfectly competitive industries; their products are similar to those sold by many other firms, and it's very easy for new competitors to enter the market. Competitive industries normally set prices based on the marginal cost of providing the service. Set your price any lower and you won't be able to cover your costs. Set it any higher and your customers will go somewhere else. So if providing services to one gender costs more than another, discriminatory pricing is just smart business.

This probably explains the current price structure. One of the manicurists interviewed said that a man's manicure takes longer than a woman's. One often sees complaints that women pay more for dry-cleaning than men. But dry-cleaners are quick to point out that laundering women's shirts is more labour intensive and requires different machinery than men's shirts.

The same is true for haircuts. For many men it is a highly competitive, almost commodified service. Most men I know are fairly indifferent to who cuts their hair; it's a fast service purchased frequently. But women's salons are monopolistically competitive. Many women form strong attachments to their stylists, whom only they visit a few times a year. Women's cuts are more labour intensive, requiring skill and artistry (or so my stylist would have me believe). It is easy to believe such work would command a premium above a men's haircut. The likely outcome of enforcing the city law will be men paying more for haircuts (but less for manicures), subsidising women's haircuts. This provides an opportunity for salons that cater more to men's needs because they can charge lower prices. Though I doubt gender segregation in hair and nail salons is the ultimate goal of city lawmakers.

Uniform gender pricing can have serious consequences. Last year the European Court of Justice also took on gender pricing, ruling that insurers must charge the same price to men and women starting at the end of this year. This is a problem for insurance companies selling annuities. Women typically live longer than men so their annuities are more expensive. Requiring one price means men must subsidise women's annuities. Single men then end up with lower retirement income. The worry is that because men no longer pay an actuarially fair price they won't buy annuities or will buy less than what's optimal, exposing them to the risk they'll out-live their assets.

Sometimes a little discrimination is no bad thing.