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Price has never been correlated with quality, for any product, ever. Price is correlated with perceived value, which includes quality, brand recognition, brand

by FfejL 9y ago

Price has never been correlated with quality, for any product, ever. Price is correlated with perceived value, which includes quality, brand recognition, brand opinion, current style, and a long list of other factors. (And, yes, this is a horrible use of the word 'correlated.' 'Derived from' or 'based on' would be much better.)

riskable 9y ago
Gold and silver buyers would disagree. Though I suppose "purity" is considerably more exact than, "quality".
- throwanem 9y ago
  Gold and silver are fungible commodities. "Retail product" is implicit in GP's context.
- FfejL 9y ago
  OK, fair enough, "no product ever" is probably too broad. But for consumer products, I stand by what I said.
deleted 9y ago
[deleted]
bryik 9y ago
> Price has never been correlated with quality, for any product, ever. That is an incredible assertion. I am willing to bet $10,000 that I can find a product where price is correlated with quality (assuming we can agree on a definition of "quality" for a particular product). How about GPUs with "quality" measured by average FPS in a selection of AAA games at 4K?
- falcolas 9y ago
  Or specifically related to this topic, Shure IEMs with Magnetic Planar drivers. Damn those sound good.
jacquesm 9y ago
> Price has never been correlated with quality, for any product, ever. Tools. Musical instruments. For both of those there is strong correlation between price and quality, and the users of both of those are picky for a good reason: the quality of the work they produce depends to some extent on the quality of the tools they use. Now, bad craftspeople and bad musicians will produce crap no matter what the tool, but good craftspeople and good musicians can definitely produce something better with good tools and instruments and are prepared to pay for that.
- analog31 9y ago
  Indeed, I've personally experienced it, purchasing instruments, notably violin family, for myself and for my kids. This can be a nerve wracking process because you're up against both the good and the bad, and you never know when you've reached good-enough. Good: Reasonable price / performance ratio, at least until you get up into "virtuoso" instruments, where I will never go anyway. With violins, there is also relatively little brand recognition. Nobody will know what you paid unless you tell them. Bad: Remarkable lack of good objective models to predict the quality of an instrument from details of its materials and construction
escape_goat 9y ago
Yes, it's definitely a horrible use of the word 'correlated', because it doesn't say what I think you're intending to say. Derived is a much better word. I believe that what you are meaning to say is that price responds to demand, and demand correlates to the perceived value of the product. In turn, perceived value is often but not inherently responsive to information about the 'quality' of the product. Instead, perceived value is a summation of various forms of utility, only some of which are affected by 'quality'. Furthermore, any determination of 'quality' is rarely made upon information that is as complete as the information available to an attempt to methodically determine the relative 'objective' quality of substitutable products, because of the disutility of conducting such an assessment. More often, the determination is based upon perceived indicators of quality, which are known to be unreliable. This diminishes the relative importance of 'quality' in the formation of the perceived value of the product, which accounts for the importance of alternate, more reliable information about the product, such as the social signalling value, and especially easily manipulable information such as indicators of "style" and the narrative about the product; this in turn explains the willingness of product vendors to invest in advertising. With regards to the use of the word 'correlate': price is of course correlated with demand, with correlates to perceived value, which tends to correlate to perceived quality, which tends to correlate to quality. Since correlation requires transitivity, price does then tend to correlate to quality. So what you actually said is incorrect. I believe that your intended assertion (as I understand it) is also incorrect and over-broad, because in many instances a highest-information assessment of quality is the sole determining factor of the perceived value of the product. This is often true in business to business transactions such as part sourcing, where a person with specialized information is in charge of purchasing, and with products in a commodity market such as grain or beans, where a standardized determination (and guarantee) of quality has been established. (Thanks for the opportunity I've taken to sit for a while and practice arranging my thoughts, which is the reason that my reply is so extensive.)
- thaumasiotes 9y ago
  > Since correlation requires transitivity What? This is certainly not the case. A standard correlation is the cosine of the angle between two vectors in an n-dimensional space. The correlation is 0 when the two vectors are orthogonal to each other - when the angle between them is 90 degrees. So consider three vectors in 2-space: (0, 1), (1, 1), and (1, 0). (1, 1) correlates with each of the other two at about 0.7, the cosine of 45 degrees. The correlation between (0, 1) and (1, 0) is zero.

by FfejL 9y ago

riskable 9y ago

Gold and silver buyers would disagree. Though I suppose "purity" is considerably more exact than, "quality".

throwanem 9y ago
Gold and silver are fungible commodities. "Retail product" is implicit in GP's context.
FfejL 9y ago
OK, fair enough, "no product ever" is probably too broad. But for consumer products, I stand by what I said.

deleted 9y ago

[deleted]

bryik 9y ago

> Price has never been correlated with quality, for any product, ever. That is an incredible assertion. I am willing to bet $10,000 that I can find a product where price is correlated with quality (assuming we can agree on a definition of "quality" for a particular product). How about GPUs with "quality" measured by average FPS in a selection of AAA games at 4K?

falcolas 9y ago
Or specifically related to this topic, Shure IEMs with Magnetic Planar drivers. Damn those sound good.

jacquesm 9y ago

> Price has never been correlated with quality, for any product, ever. Tools. Musical instruments. For both of those there is strong correlation between price and quality, and the users of both of those are picky for a good reason: the quality of the work they produce depends to some extent on the quality of the tools they use. Now, bad craftspeople and bad musicians will produce crap no matter what the tool, but good craftspeople and good musicians can definitely produce something better with good tools and instruments and are prepared to pay for that.

analog31 9y ago
Indeed, I've personally experienced it, purchasing instruments, notably violin family, for myself and for my kids. This can be a nerve wracking process because you're up against both the good and the bad, and you never know when you've reached good-enough. Good: Reasonable price / performance ratio, at least until you get up into "virtuoso" instruments, where I will never go anyway. With violins, there is also relatively little brand recognition. Nobody will know what you paid unless you tell them. Bad: Remarkable lack of good objective models to predict the quality of an instrument from details of its materials and construction

escape_goat 9y ago

Yes, it's definitely a horrible use of the word 'correlated', because it doesn't say what I think you're intending to say. Derived is a much better word. I believe that what you are meaning to say is that price responds to demand, and demand correlates to the perceived value of the product. In turn, perceived value is often but not inherently responsive to information about the 'quality' of the product. Instead, perceived value is a summation of various forms of utility, only some of which are affected by 'quality'. Furthermore, any determination of 'quality' is rarely made upon information that is as complete as the information available to an attempt to methodically determine the relative 'objective' quality of substitutable products, because of the disutility of conducting such an assessment. More often, the determination is based upon perceived indicators of quality, which are known to be unreliable. This diminishes the relative importance of 'quality' in the formation of the perceived value of the product, which accounts for the importance of alternate, more reliable information about the product, such as the social signalling value, and especially easily manipulable information such as indicators of "style" and the narrative about the product; this in turn explains the willingness of product vendors to invest in advertising. With regards to the use of the word 'correlate': price is of course correlated with demand, with correlates to perceived value, which tends to correlate to perceived quality, which tends to correlate to quality. Since correlation requires transitivity, price does then tend to correlate to quality. So what you actually said is incorrect. I believe that your intended assertion (as I understand it) is also incorrect and over-broad, because in many instances a highest-information assessment of quality is the sole determining factor of the perceived value of the product. This is often true in business to business transactions such as part sourcing, where a person with specialized information is in charge of purchasing, and with products in a commodity market such as grain or beans, where a standardized determination (and guarantee) of quality has been established. (Thanks for the opportunity I've taken to sit for a while and practice arranging my thoughts, which is the reason that my reply is so extensive.)

thaumasiotes 9y ago
> Since correlation requires transitivity What? This is certainly not the case. A standard correlation is the cosine of the angle between two vectors in an n-dimensional space. The correlation is 0 when the two vectors are orthogonal to each other - when the angle between them is 90 degrees. So consider three vectors in 2-space: (0, 1), (1, 1), and (1, 0). (1, 1) correlates with each of the other two at about 0.7, the cosine of 45 degrees. The correlation between (0, 1) and (1, 0) is zero.