Men, Women, and Taxi Fare

(Photo: Martin Garcia)

A study on the taxi market in Lima, Peru examines price differences between men and women. Taxi prices in Lima are set by bargaining, and the market of sellers is extremely competitive. The authors initially found, surprisingly, that “men face higher initial prices and rejection rates.”

However, when the experiment was performed again with a strategic move, the discrimination disappeared:

Passengers in this study begin by rejecting a first taxi to send a signal of low valuation to a second (waiting) taxi which they then negotiate with. Despite passengers otherwise using an identical bargaining script, we find that negotiated outcomes at the second taxi are gender blind. The second taxi treats men and women the same.

The authors conclude:

One interpretation of our finding is that drivers in this market do not have preferences for the gender of the passenger that they are transporting. Another interpretation is that the competitive pressure and associated low earnings prevent drivers from expressing any bias they may have against a certain type of passenger.

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  1. Kent Pilkington says:

    Unless I’m missing something, it seems that a simpler explanation (assuming the second driver sees the first being rejected) is that the second driver gets an emotional boost/validation at being chosen over the first, which outweighs a gender preference. So, initially, the question is “who do I want in my cab?”, but that gets outweighed (or counter-balanced) when the question changes to “who do they want driving their cab?” and the answer is, “me!”

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  2. HispanicPundit says:

    A third explanation is that the higher charge for men is one of security risk. And having the second taxi see the man skip the first taxi is a STRONG signal that the person is not a thief, or of risky behavior. That’d be my primary guess as to why.

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  3. Eric M. Jones. says:

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    • kip says:

      I think they got it right. Sex is what genitals you were born with–whether you have a Y chromosome or not. A taxi driver can’t really tell that by looking at you. But they can tell if you are dressed like a man or a woman–which is to say, which gender you identify with.

      They determined it to be “gender blind” because there was no difference in outcome based on gender.

      Would it matter if the taxi drivers are men or women? Both could discriminate against men in their fares.

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    • random_one says:

      I have ridden in hundreds of taxis in Lima and never once had a female driver (and that is not as a result of gender bias on my part). In fact I have not ever seen a woman driving a taxi there.

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