Women’s Approachability Premium in Sales: A Field Experiment Among Microentrepreneurs

Female entrepreneurs consistently earn less than their male counterparts, a disparity that is particularly acute among microentrepreneurs in developing economies. Researchers often attribute this gap to structural constraints but pay less attention to how social interactions shape earnings. This oversight is especially relevant in microentrepreneurship, where sales are contingent on customers approaching and interacting with sellers in the marketplace. Using an interactionist lens, we draw on social exchange theory and research on gender stereotypes to guide expectations. We anticipate that customers will more often approach female sellers, expecting warmer interactions, and that this higher volume of customers will translate into higher earnings when business characteristics and selling behavior are held constant. Existing research hints at this dynamic, but methodological constraints have obscured it. To overcome these constraints and test our theory, we conducted a field experiment in two face-to-face markets in India. We trained confederate sellers to run identical, de novo microenterprises and follow standard protocols for customer engagement, thus isolating customer approach in response to sellers’ gender. Female sellers attracted 41% more customers, resulting in significantly higher sales than men, all else equal, in our experiment. Consistent with our theory, customers were more likely to talk with women about topics unrelated to the sale and attempt to bargain with women. This study advances research on gender dynamics in entrepreneurship, negotiation, and customer-facing work by identifying customer approach as a novel mechanism that can generate economic advantages for female microentrepreneurs and may shape gendered opportunities in other markets and organizations.

Funding: Weiss Family Program Fund for Research in Development Economics, Harvard University (with Odyssia Ng) Stanford King Center on Global Development, Stanford University (with Odyssia Ng) BRAC-CEGA Travel Grant, Center for Effective Global Action, UC Berkeley, (with Odyssia Ng), Global Policy Fellows Research Grant, The Freeman Spogli Institute for International Studies, Stanford University, 2017–2018 (with Odyssia Ng), Diversity Dissertation Research Opportunity, Vice Provost for Graduate Education, Stanford University, 2017–2018 (with Odyssia Ng), Graduate Research Opportunity, School of Humanities and Sciences, Stanford University, 2017–2018 (with Odyssia Ng), Enhancing Diversity in Graduate Education Doctoral Fellowship, Research & Conference Travel Award, Vice Provost for Graduate Education, Stanford University, Graduate Student Research Fellowship, Center for South Asia, Stanford University George P. Shultz Graduate Student Fellowship in Economic Policy, Stanford Institute for Economic Policy Research (with Odyssia Ng), PhD I-Award, Stanford Institute for Innovation in Developing Economies.

Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2024.18859.