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Quality Indicators: in Theory and in Fact

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  • Christian Hjorth-Andersen

    (Institute of Economics, University of Copenhagen)

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.

Suggested Citation

  • Christian Hjorth-Andersen, 1988. "Quality Indicators: in Theory and in Fact," Discussion Papers 88-08, University of Copenhagen. Department of Economics.
  • Handle: RePEc:kud:kuiedp:8808
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    Cited by:

    1. Frédéric Gagey & Jean-Philippe Vincent & M. Fourcade & T. Francq & J.-J. Preuss, 1990. "Compétitivité des produits français : une approche par la qualité," Revue de l'OFCE, Programme National Persée, vol. 32(1), pages 125-144.

    More about this item

    Keywords

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

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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