Publications
Publications
- July 2021
- Journal of Consumer Psychology
Consumers—Especially Women—Avoid Buying from Firms with Higher Gender Pay Gaps
By: Tobias Schlager, Bhavya Mohan, Katherine DeCelles and Michael I. Norton
Abstract
We document a unique driver of consumer behavior: the public disclosure of a firm’s gender pay gap. Four experiments provide causal evidence that when firms are revealed to have gender pay gaps, consumers are less willing to pay for their goods, a reaction driven by consumer perceptions of unfairness. Unlike reactions to CEO-to-worker wage gaps, this effect varies by consumers’ gender: Compared to men, women show larger decreases in purchase intentions toward firms with gender pay gaps. Social media data, from before and after the United Kingdom legally mandated many firms to disclose their gender pay gaps, further demonstrate that gender pay gaps correlate with negative consumer reactions; once again, women are more likely than men to express negative sentiments online in response to pay gap-related topics. Although we show that consumers will punish firms with their wallets, we also observe boundary conditions: When decisions incur a sufficient cost to the self—such as when needing a ride-share when rain is very likely—the negative effects of gender gap disclosure are attenuated.
Keywords
Pay Gap; Perceived Wage Fairness; Purchase Intention; Gender; Wages; Fairness; Perception; Consumer Behavior
Citation
Schlager, Tobias, Bhavya Mohan, Katherine DeCelles, and Michael I. Norton. "Consumers—Especially Women—Avoid Buying from Firms with Higher Gender Pay Gaps." Special Issue on Consumer Psychology for the Greater Good. Journal of Consumer Psychology 31, no. 3 (July 2021): 518–531.
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