Quick Hit: The economics of “Ladies drink free”

Ever wondered why it is that some night clubs charge women less for entry than they charge men, or let them drink for free? Is it because these establishments are aware of the gender pay gap and are trying to exercise a little after-hours affirmative action? Is it because they are deeply invested in the theory of gender analysis developed by Lauper in the late 1980s, i.e., that girls just want to have fun?

No. It is because they think that guys will pay for access to drunk girls. In other words, sexism! (Is it also sexist to charge men one rate and women another? Why yes, it is! Sexism hurts everyone!)

Jamie Keiles over at Teenagerie has figured out how to maximize your sexism at your next Ladies Drink Free night. For example, how much should you charge gay guys? What about ugly ladies? What about straight couples? Keiles, who is clearly an economics major, breaks it down for you.

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3 Comments

  1. Posted February 28, 2011 at 3:21 pm | Permalink

    I don’t drink at all anymore, but when I did, I tried to avoid bars like this. Drunk men surrounded by intoxicated women is a recipe for disaster. And, I severely dislike certain immature men who are so threatened when other guys so much as look at their girlfriends that they immediately grow aggressive and obnoxious.

    If it ever gets to be a major issue one single time, you never forget it.

  2. Posted February 28, 2011 at 5:54 pm | Permalink

    I will admit, this is a little like the case of Walmart, ethically horrifying but economically brilliant. I am not sure whether to take notes or run in the opposite direction… Perhaps some combination of the two would be most fitting.

    This situation, I think, is a little more complex than initially portrayed. Firms of all sorts are profit maximizing machines. As such “ladies party free” (either by waving the cover charge for women, waving a drink minimum, or giving away a number of free drinks) nights at worst do no damage to the bottom line, but, more likely, serve to help it somehow. To me, this seems like an interesting question. Hoe can giving product away for free increase profits?

    One possibility is that by giving some product away for free, the firm will decrease the overall per-unit cost to women, thus increasing overall consumption. This consumption will yield less profits for the firm than a similar amount of consumption by men, but the profit might be more than would otherwise have been realized with a uniform pricing schedule. As an example, if women are not charged a cover-fee, they may purchase more alcohol on average.

    Another potential case is that it is a subtle tax on men (as implied by this article and the linked article). If on average, women go to these events and take total advantage of the situation, but are still willing to accept gifts from men, the firm could use women as essentially extra advertising: “Come here! Talk to women! Buy them drinks! It’ll be fun!” sort of mentality. The only way for this to work is if men value talking to drunk women MORE than they value the added cover-charge, drink costs, etc…. Which, if that is the case, reveals something somewhat horrifying about the aggregated male market.

    tl;dr: There is a profit-maximizing mechanism driving this idea/trope/convention, and I wonder what specifically it is.

  3. Posted February 28, 2011 at 6:59 pm | Permalink

    The point of lady’s night is to attract the dollars of horny men, based on the premise that there will be drunk women present?

    Well, duh. I’ve never gone to a bar, and I could have told you that. Of course, I grew up in a co-ed college town….

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