Comments on Women Pay More

maybe women suck at free-market capitalism...

I'm curious about some of the wording, like talking about earnings. Credit doesn't depend on earnings; lots of people with high incomes have crap credit ratings, and vice versa.

I'm not saying it isn't true; just that these kinds of "studies" come out all the time, and they're geared to say what the authors want them to say.

It also seems that low-risk women paying high-risk rates are a potential goldmine for a loan company that should be able to easily undercut the market on these overpriced loans, and make a fortune while saving the women money. The only bias most mortgage people recognize is the bias towards money. Why hasn't this corrected itself?

PS: there was nothing resembling a shitstorm over your previous post.

You know, I've been married so long that it's been hard to assess whether financial transactions are more fair now than when I was just starting out. Back then (the early 70s!) I had to settle for a lower credit card limit and a higher interest rate unless my husband cosigned the account.

My comfortable assumption has been that with so many of us working, even becoming the principal wage-earners in our families, lenders would not find any advantage in assuming that we were poorer credit risks.

This study, even if it is only one study, is interesting and disturbing. All this time I have been assuming that I have a good credit rating because my husband and I are treated as a team by lenders. This study suggests that maybe I am just reaping the benefits of old-fashioned coverture.

Women must be worse credit risks (actuarial tables don’t lie, though they are often insensitive) or worse at shopping for and negotiating loans (distracted by sore breasts, heavy flows or hot flashes?).

But Erica, Where is the outrage at this?
http://seattletimes.nwsource.com/html/localnews/2003535398_coffeegirls22e.html

You_gotta_be_kidding_me: Maybe if you clicked the link, you'd realize every sentence in the article addresses your first point (women are actually better credit risks).

For your second point, 1) you're retarded, and 2) I don't doubt that women are "worse" at negotiating loans. The banking industry is still a good ol' boys club. It's hard to negotiate and get a good deal when you are dealing with resentful old white republican men who hold all the cards. Imagine if you had to go to the ghetto and negotiate with inner-city black street kids to get a mortgage. It would be very difficult for you to leverage your position in a hostile environment like that in a culture so much different than what you're used to (ie, klan meetings).

As for the coffee girls, I don't think Erica is too outraged since right now I see an ad with a naked stripper on the right side of your comment.

Okay, so it’s not the credit risk. That only leaves the natural ability of the female mind to comprehend and favorably negotiate complex financial transactions. (Mother never could balance her check book right either.) Don’t worry; I’m sure there are some things you girls are naturally good at.

Approximately zero percent of home mortgage loans are negotiated with "resentful old Republican men". If you'd ever bought a house, you'd know that. For one thing, you don't negotiate at all; you take what the fuck you're offered. Or you pick someone else. And the loan officer is more likely to be a Hispanic guy or a white woman in an ill-fitting suit at a pressboard desk in a cubicle, either at your local bank branch or in a strip-mall loan office, or maybe in a little conference room down the hall from your real estate agent's. Nasty little home loans are not the province of the Big Boys.

The point about credit risk is: if women are better credit risks, then they default less; that's what the rating MEANS. So, if you can get away with selling loans to women at a huge premium, charging them higher rates than their credit score justifies, then, by definition, there is a market inequity there that can be exploited. Market inequities that can be exploited ALWAYS ARE exploited. Someone will step in and offer a better rate, because they know they can undercut the sexists and still enjoy the benefits of the low default rate, and make more money.

There isn't a loan officer in the country who wouldn't jump all over that in a second. A large pool of borrowers who are low-risk but accustomed to paying a high-risk premium? They'd be knocking on your front door.

Women do pay less for auto insurance though, particularly those with good credit. Mind you, it's cause we men are fucking idiots on the road who get in more and worse accidents.

mortgage vs auto insurance

as a casual observer, it is difficult to tell if something is motivated by sexism or by other factors. when i read this i thought about auto insurance as well... and thus have the sincere question:

how can we tell when a policy is motivated by pure sexism vs other factors related to sex? and then, of course, is the latter fair?

And if you want to talk about real inequity, look at the differences in average life span between men and women. I think anything the men pick up on the plus side gets more than evened out by those extra 7 years of being alive after you’ve worked/nagged your man into his early grave.

you_gotta_be_kidding_me seems like a hostile person voicing a hostile opinion. the thought that a partner nagged or worked their spouse to an early death is disguisting -- and that post does not deserve response.

please don't allow a hostile and fringe opinion to derail what i'm hoping could be an interesting or well-reasoned thread.

Your right I sound hostile. I’m sick to death of hearing women whine about how unfair life is to them (boo hoo hoo). Guess what ladies; it’s unfair all over and for everyone. The difference is that you don’t hear men whining about every little thing, but you could sure put together a list of where women come out ahead. I’d suggest you start with life expectancy (I think it’s fair to characterize that as a pretty big one) and work from there. If the numbers on that one were reversed there would be a deafening public outcry.

Here are just a few others: child custody rights, access to abortions to avoid childcare expense (men never get to choose), insurance rates, women’s only vs. men’s only spaces & organizations, registration for selective service and access to welfare.

I would be glad to pay more for a mortgage if it meant never getting stuck with a kid I didn’t want and living an extra seven years.

you've convinced me. your post clearly demonstrates that not only do men never whine, but they certainly have it worse than women.

Two quick comments here:

- Mortgage people are in fact realizing that more single women are buying houses: http://www.scotsmanguide.com/default.asp?ID=1293

- Part of the reason many of women homebuyers are subprime borrowers is that they might not have verifiable income. Think about it: A good number of single women buying houses and seeking large loans are divorcees with great credit who can only qualify with a stated-income, stated-asset loan (SISA), which is far riskier than what many A-paper banks want to handle. Hence the higher interest rates and risk premiums.

Today's study did not account for married women who are included as borrowers with their husbands on loan docs.

that's seven years sooner you get to stop listening to people whine! and seven less years of child support payments! things are really going your way! don't rock the boat now...

Some of the factors in lower life expectancy for men:

Men avoid going to the doctor and have worse health as a result.

Men are more likely to be victims of violent crime...at the hands of other men.

Men are more likely to commit suicide and become addicted to drugs/alcohol. This may be related to my first point -- men are less likely to get help when they need it whether for their physical or mental health.

You are such a fucking whiner, YGTBKM.

And another thing. In reference to your nagging into the grave bullshit, married men live longer than single men.

About the so-called comment shitstorm about haircut pricing, Erica is not addressing the most substantive criticism among those comments: that there are other reasonable explanations for differential pricing besides her explanation (sexism).

As for mortgages, Erica mentions only that income was controlled for. Other factors are used in approving mortgages, such as credit (as some commenters have mentioned here), debt, years on job, and so on. I haven't read the study to see how well it controlled for these variables, but Erica's post suggests that she doesn't even realize that these factors matter. Nor does she raise the alternative explanations, such as that women are not choosy shoppers when it comes to mortgages (I don't know whether this is true or not, but it's possible). Perhaps they are so busy with career and the second shift at home that they don't have time to shop around for the best deal -- now there's an explanation that a feminist could get behind.

Isn't there some at The Stranger with basic statistical literacy who would be better suited to blogging on such matters?

The study does account for credit score. I don't know about the other factors (debt, years on job).

More importantly, why in the hell is the "leading resource for mortgage originators" called The Scotsman Guide? That's just weird. Any real scotsmen reading who want to offer a theory?

And why does their search feature have a picture of a woman flipping the bird?

Where was ECB's famous sense of sexual indignation when the Seattle PI published this sexist pile of shit a couple of weeks ago? I suppose that, so long as the stereotypes are biased against men (we're just bad with money, you know...), they're not worth mentioning.

Oh, A Nony Mouse, don't you realize that it is only fasionable with ECB to degrade men? (I can only assume she needs a good man in her life.) Either that or she's not getting enough iron in her diet.

keshmeshi:
Try not to get your panties in a bunch.

There's a stereotype that men are bad with money? Since when? Well then, I guess the pendulum has swung the other way, since #16's article says that women couldn't get loans, even credit cards, just 30 years ago.

All I'm saying is life isn't fair for anyone. Deal with it. Some people pay more for hair cuts, some pay more for car insurance. Such is life.

If everyone wrote with Econ101's sense of calm and style, these thread dustups would be a lot less frequent, but then we wouldn't be treated to the sight of YGBKM and Kashmeshi tied together in a sack and thrown in the Tiber.
Anyway, what E101 said. Women's dry cleaning? Much greater variance in styles, requiring more care. Haircuts? As for the same cut as men do, you'll pay the same price. Nobody wrote in to say, "I went to Supercuts, asked for them to use the 1 1/2 clippers on the sides, a four on the top, and they STILL charged me more than the guy in the chair next to me!"
The whole pay-inequality thing broke down to 'well, it happens, and you don't KNOW it.' As Fnarf said above, tappable markets are always exploited. IF a manager could hire 5 women for the price of 4 men, they'd do it. Still no word on the Stranger's hiring practices ($10/dudes, $7.50 chicks, right?)
Re insurance, guys pay more because statistically, teenage guys are horrible drivers. They crash the most,they pay the most. As a non-crasher, I found that unfair, but at least I got the reasoning behind it.
As Fnarf also said, mortgages are market-driven. You call around, they run your credit, ask you about your finances, boom. I dealt with one young white guy, one white woman, and one Latina. Whoever thinks there's a Republican Scrooge McDuck doling out mortgages has never applied for one. Banks are interested in one thing - making money. There may be, somewhere, a bank of KKK that lends to deadbeat white boys, but they don't do much business.
It's hardly a 'shitstorm' when you make several provocative claims, then decline to explain or defend them.

Econ101 is right: Erica totally ignored what people were saying about women paying more for haircuts, which is NOT that women don't pay more, but that there are perfectly sensible economic reasons that women pay more for haircuts on average - women's hairstyles being more complex, women being more selective about skill in their stylist, etc. Try telling a stylist who mostly works with women that they're gouging their customers and provide no more service than the old guy who gives my dad a quick buzzcut now and then, and see what they have to say about that.

But I suppose it was easier for Erica to go after the straw man.

The fundamental problem with the argument that a free-market economy is somehow completely free of such inefficiencies as Erica is describes is, that's wonderful in theory, but terrible in practice.

This comment at another blog has a good summary why:

"I never was taught basic economics (Latin and Greek were thought to be much more useful), but the logic of a rightward shift seems pretty straightforward to me.

First, you are taught how to conjugate a verb. That would be Latin 101.

Metella est mater. Quintis est filius et ambulat in hortum. Hic, haec, hoc. (This is all I can remember)

Then you spend the next 5 years learning all the 20,000 exceptions to the rule. That would be real Latin.

Similarly, Econ 101 is for libertarians, while economy is for, huh, real economists. The libertarians never get past the Esperanto-like first grade version of Latin.

They only learn the first bit: how markets work. They never get round to the second, far more frustrating bit: markets don’t work all the time, and can indeed fail disastrously. The invisible hand often needs guidance."

As to the issue at hand, it is fairly easy to observe that many commodities and services are priced more expensively for women than for men. The problem is, not all individuals are observant.

Oh, and just to address comment #1: Yes, women do suck at free-market capitalism. Unfortunately, so do men. Take a look sometime at Nassim Nicholas Taleb's Fooled by Randomness and ask yourself, "Are the rich skillful, or are they lucky? How do you know?"

Well, jeez, Hal, many of us have already agreed that, say, women's blouses cost more to dry clean than men's shirts, or the haircut thing, and explained why - more time spent doing that job. It takes only a minimally observant individual to discern this reason.
If you, or anyone, has found that women wearing mens' shirts and asking for mens' haircuts are being charged more by the same vendors that service men, please come forward with this information.
THis thread started on the subject of mortgages. Your quote from another blog had to do with 'why markets fail disastrously' sometimes. Fail who? Themselves? Yes, businesses frequently shut down. But more often, they fail their workers, and do their best to screw their customers, and they don't care about gender, they care about how much muh-nay they have at the end of the day.
This Conspira-tastic idea of fat white Republican bankers interviewing bright, high-earning independant women and hosing them with high rates as opposed to high risk, low-earning dudes from the trailer park that they're happy to chop off a few points for....Really, how many of you HAVE shopped for rates? To say that sometimes the market fails, therefore any accusation based on bad business practice is viable, is a bit much oversimplifying.
Banks want to lend you money, as much as they fucking can UP TO the point where they think you won't or can't pay it back. These decisions are based on tables related to things like gender, married/unmarried, current debt, and current income. It may not seem fair at the time, but they do have to go by something.
I had a friend doing bank loans in DC, who once casually mentioned what great credit risks Chinese people were, "....oh yeah, you lend to a Chinese family, you know they're going to pay," something like that. Was this racist? I suppose (Honky Power Now!). Was it inaccurate? I can't say, I don't lend money. But it certainly gave a window into how many lenders think.

Hal O'Brien @ 29 writes:
"... it is fairly easy to observe that many commodities and services are priced more expensively for women than for men."

I doubt what you're describing is even legal. Could I charge women and men different prices for identical goods (say, "oreo cookies") or services (say, Italian lessons)? What we're talking about here is different prices for *different* services. Not all customers' haircuts are identical. Neither are mortgages, due to the differential risks assumed by the lender.

On the subject of market failure, serious proponents of a free market do not claim that market inefficiencies never happen, merely that such problems tend to correct themselves over time for the reasons described earlier in this thread. "Government failure," on the other hand, is not nearly as self-correcting, due to political influence of special interests, the advantage of incumbency, the difficulty of obtaining complete information in a command-and-control economy, and so on.

The few times that I have seen identical products or services priced differently for men and women, the advantage has usually gone to women. The example that springs to mind is liquor and cover charges at bars that have ladies nights.