August 15, 2006

Women Earn, Charge Less, in Wage Gap: Study

By Ellen Wulfhorst

NEW YORK -- Women in America earn less than men, a disparity that provokes plenty of discussion and debate. But a new study found that women themselves may be partly responsible for the pay gap.

Women professionals tend to charge less than men for the same work out of concern for relationships with clients, according to the study to be released this week at the annual meeting of the Academy of Management.

Analyzing the pricing patterns of 536 veterinarians, the study found female vets charged needier clients less than more affluent clients, while male vets set their prices regardless of a client's situation.

About one third of the vets were women.

The women vets adjusted their prices because they cared more about their relationships with their customers than did the men, the study said.

"Women view their pricing of a particular service as just one instance in a relationship where there will be many other services and many other pricing opportunities, as opposed to 'I need to make X profit on this transaction here,"' said Mary Gilly, a marketing professor at the University of California, Irvine, and a co-author of the study.

The vets were asked to respond to a hypothetical scenario involving a 12-year-old dog with advanced kidney failure. The vets could offer treatment options to the hypothetical client, described either as a "young professional" or an "elderly widow." The female vets tended to charge the widow less.

In larger veterinary practices, however, women vets charged higher prices, as they took into consideration the needs of their co-workers as well, the study said.

"Women ... take into consideration their customers, and they take into consideration their associates," Gilly said.

"For women, their relationships with customers matter, their relationships with people they work with matter, and it doesn't seem to matter for men," she said. "Men just price the same, regardless."

Separate research in 2003 found female mortgage lenders made $575 less per loan than their male counterparts. That study suggested women brokers were more concerned about establishing good relationships and being nice than men.

According to U.S. government statistics, overall, working women earn roughly 80 cents for every dollar a man makes.

The Academy of Management, a research and teaching organization, has nearly 17,000 members worldwide. The study will be presented at it's annual meeting on Wednesday.