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Quality Indicators: in Theory and in Fact

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  • Christian Hjorth-Andersen

    (Institute of Economics, University of Copenhagen)

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    Abstract

    In recent literature, it has been suggested that consumers need have no knowledge of product quality as a number of quality indicators (or signals) may be used as substitutes. Very little attention has been paid to the empirical verification of these studies. The present paper is devoted to the issue of how well these indicators perform, using market data provided by consumer magazines from three countries. The results strongly indicate that price is a poor quality indicator. The paper also presents some evidence that suggests that seller reputation and easily observable characteristics are also poor indicators.

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    Bibliographic Info

    Paper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number 88-08.

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    Length: 32 pages
    Date of creation: Jun 1988
    Date of revision:
    Publication status: Published in: European Economic Review, 1991, 35(8) pp 1491-1505
    Handle: RePEc:kud:kuiedp:8808

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    Keywords: marketing and advertising; consumer; U.S.; Denmark; Germany;

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