If You Think 9-Ending Prices Are Low, Think Again

Avichai Snir and Daniel Levy ()

Journal of the Association for Consumer Research, 2021, vol. 6, issue 1, 33 - 47

Abstract: The 9-ending prices, which comprise between 40% and 95% of retail prices, are popular because shoppers perceive them as being low. We study whether this belief is justified using scanner price-data with more than 98-million observations from a large US grocery chain. We find that 9-ending prices are higher than non-9-ending prices, by as much as 18%. Two factors explain why shoppers believe, mistakenly, that 9-ending prices are low. First, we find that among sale prices, 9-ending prices are indeed lower than non-9-ending prices, giving 9-ending prices an aura of being low. Second, 9-ending prices were indeed lower than other prices. Shoppers therefore learned to associate 9-endings with low prices. Over time, however, 9-ending prices rose substantially, which shoppers failed to notice, because the continuous use of 9-ending prices for promoting deep price cuts draws shoppers’ attention to them and helps to maintain and preserve the image of 9-ending prices as bargain prices.

Date: 2021
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Citations: View citations in EconPapers (16)

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Related works:
Journal Article: If You Think 9-Ending Prices Are Low, Think Again (2021)
Working Paper: If You Think 9-Ending Prices Are Low, Think Again (2019)
Working Paper: If You Think 9-Ending Prices Are Low, Think Again (2019)
Working Paper: If You Think 9-Ending Prices Are Low, Think Again (2019)
Working Paper: If You Think 9-Ending Prices Are Low, Think Again (2019)
Working Paper: If You Think 9-Ending Prices Are Low,Think Again (2019)
Working Paper: If You Think 9-Ending Prices Are Low, Think Again (2019)
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