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Demographics, gender and local knowledge — Price discrimination in China’s car market

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  • Chen, Li-Zhong
  • Hu, Wei-Min
  • Szulga, Radek
  • Zhou, Xiaolan

Abstract

In this paper we examine price differentials across various groups in the Chinese automobile market between 2007 and 2009 using a unique detailed dataset on over 145,000 transactions which allows us to control for a wide variety of buyer, vehicle, location, and dealer characteristics. We focus on gender based price discrimination and how it interacts with the origin of the buyer. We find that, controlling for a wide array of other characteristics men pay lower prices for cars than women. Additionally, men who live locally or who were born locally receive additional discounts relative to non-locals, but interestingly, this effect is not present for women.

Suggested Citation

  • Chen, Li-Zhong & Hu, Wei-Min & Szulga, Radek & Zhou, Xiaolan, 2018. "Demographics, gender and local knowledge — Price discrimination in China’s car market," Economics Letters, Elsevier, vol. 163(C), pages 172-174.
    • Handle: RePEc:eee:ecolet:v:163:y:2018:i:c:p:172-174
    DOI: 10.1016/j.econlet.2017.11.026
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    References listed on IDEAS

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    1. Ayres, Ian & Siegelman, Peter, 1995. "Race and Gender Discrimination in Bargaining for a New Car," American Economic Review, American Economic Association, vol. 85(3), pages 304-321, June.
    2. Goldberg, Pinelopi Koujianou, 1996. "Dealer Price Discrimination in New Car Purchases: Evidence from the Consumer Expenditure Survey," Journal of Political Economy, University of Chicago Press, vol. 104(3), pages 622-654, June.
    3. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
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    Cited by:

    1. Zamora, Paula & Mantilla, César & Blanco, Mariana, 2021. "Price discrimination in informal labor markets in Bogotá: an audit experiment during the 2018 FIFA World Cup," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 55, pages 1-6.
    2. repec:iab:iabjlr:v:55:i::p:art.6 is not listed on IDEAS
    3. Mbaye, Souleymane & Bunel, Mathieu & L'Horty, Yannick & Petit, Pascale & Parquet, Loïc du, 2020. "Discriminations in the market for “Lemons”: A multicriteria correspondence test in France," Economics of Transportation, Elsevier, vol. 24(C).
    4. Paula Zamora & César Mantilla & Mariana Blanco, 2021. "Price discrimination in informal labor markets in Bogotá: an audit experiment during the 2018 FIFA World Cup," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 55(1), pages 1-24, December.

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    More about this item

    Keywords

    Price discrimination; Vehicle market China; Statistical discrimination;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • L9 - Industrial Organization - - Industry Studies: Transportation and Utilities

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