Should Prices of Consumer Goods Be Better Indicators of Product Quality?

Heiner Imkamp ()
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Heiner Imkamp: University of Hohenheim, Household and Consumer Economics (530A)

Journal of Consumer Policy, 2018, vol. 41, issue 1, No 5, 77-81

Abstract: Abstract In contrast to the common assumption that prices are good indicators of quality, this note argues that price-quality correlations are typically rather low. Such low coefficients are not surprising since mass-produced goods of high quality may have lower prices than scarce goods of lower quality. In addition, low correlations can be characterized as desirable, since prices are an indicator not of quality but of scarcity.

Date: 2018
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DOI: 10.1007/s10603-018-9367-2

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