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Do Stricter Licences Raise the Price of a Haircut?

We compared state training rules for hairdressers with what salons charge. Here is what the data can tell you, and what it can’t.

Open LedgerPartnerReviewed by the Economics desk · 8 min read · [DATE]4 sources

The Question

Most US states require a licence to cut hair for money, and the training hours they demand vary widely from state to state.1

If more hours mean better, safer haircuts, a higher price may be worth paying. If they mostly keep new hairdressers out, customers pay for the rule and get little back. We set out to measure the first half of that question: does the price change?

What We Found

Findings
  1. 1Salons in states requiring 1,500 hours or more charged [FIGURE]% more for a basic haircut than salons in states requiring under 1,000 hours.3
  2. 2The gap shrank to [FIGURE]% once we accounted for local wages and rents.4
  3. 3We could not test whether more training means safer service. Complaint records were too patchy to compare.
Price of a basic haircut, by training hours requiredMedian price in US dollars, grouped by state rule, [YEAR] · values to be added from the dataset
Median salon priceNational median
$0[FIGURE]Under 1,000 h[N] states[FIGURE]1,000–1,499 h[N] states[FIGURE]1,500 h or more[N] states
Source: Open Ledger salon price survey · DatasetBars are illustrative until the data is final.

Data and Method

We collected listed prices for a basic haircut from [N] salons in [N] cities, and matched each state to the training hours its rules require.1 Then we compared prices across the three groups of states.

Prices also rise with local wages and rent, so we adjusted for both using official wage data.4 The full design, and the data itself, are in the Methods panel on the right. You can download the data and check our work.

What It Doesn’t Show

This is a snapshot of one year. It shows that prices differ between groups of states; it can’t prove that the rules caused the difference.

The strongest case for strict licensing

Hairdressers work with sharp tools and strong chemicals. Training protects customers from infections and burns they can’t judge in advance. If longer training buys safer, better work, a higher price is the cost of quality, not waste.

The quality question is weighed in Morris Kleiner’s Licensing Occupations (2006). Source 2
Is this fair to that view?

Key takeaways

  • Haircuts cost more where training rules are stricter, even after local costs.
  • A price gap alone doesn’t tell you whether the rule is worth it.
  • Better data on safety and complaints would settle more of the argument.
Live debate · Round 2 of 3This House Would Abolish Occupational Licensing for Hairdressers58% for · 42% againstJoin the debate

Sources

  1. 1License to Work: A National Study of Burdens from Occupational Licensing · Institute for Justice, 3rd edition, 2022 · Report
  2. 2Licensing Occupations: Ensuring Quality or Restricting Competition? · Morris M. Kleiner, W.E. Upjohn Institute, 2006 · Book
  3. 3Salon price survey · Open Ledger, [YEAR] · Dataset · CSV
  4. 4Occupational Employment and Wage Statistics · US Bureau of Labor Statistics, [YEAR] · Dataset
Occupational licensingWorkCompetition
Open LedgerPartnerPartner organisation · work reviewed by Reprogram editorsOpen Ledger publishes small, checkable studies with the data attached. Funding: [FUNDERS].

Discussion

18 comments · Best sourced first

Tomás Ferreira· 3 h

Good that the CSV is attached. I’d like to see the same test on wait times for an appointment, not only price.

Join the discussion (18)
Case studyPoland, 1990: What Happened When Prices Were FreedDaniel Kovač · 9 min readRethink“Rent control makes housing affordable.”Misleading· 4 sources
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