Archive for the ‘Folk Wisdom’ Category

The price-equals-quality fallacy

September 11, 2007

“We tend to think of higher-priced goods as being of better quality than lower-priced goods; but while You get what you pay for may be folk wisdom, it isn’t always true.”

“In the 1950s, Pepsi competed with Coca-Cola by selling its soda at half the price of Coke and advertising twice as much for the nickel. But more people bought Pepsi after it raised its price, a lesson not lost to other marketers. ”

“The price-equals-quality fallacy is exploited in many ways. Many second-tier private colleges and universities make sure the sticker price of their tuition is close to (or even higher than) Harvard’s, Princeton’s, and Yale’s, in the hope that parents and students will take the mental shortcut of equating price with quality.”

“Consumer Reports magazine, which conducts carefully designed tests on all sorts of products from automobiles to toasters to TV sets, often finds lower-priced goods to be of higher quality than those costing much more. For example, in a comparison of upright vacuum cleaners on the magazine’s website in 2006, the $140 Eureka Boss Smart Vac Ultra 4870 was rated better overall than the $1,330 Kirby Ultimate G Diamond Edition or the $700 Oreck XL21-700. The Eureka was also better than the highly advertised $500 Dyson DC150.”

Unspun by Brooks Jackson and Kathleen Hall Jamieson