Skip to content

The Effect of Correlation between Price and Quality on Consumer Choice.

by Lisa Ordóñez
Organizational behavior and human decision processes ()
Get full text at journal


According to the price-expectancy model of consumer choice, consumers evaluate products by comparing the actual price with a reference or expected price determined from (a) product's quality and (b) the price-quality correlation of the product category. Choices between hypothetical products of beer are used to test the model against a model without a reference price. Consistent with the price-expectancy model, product preferences varied with the subjective correlation between price and quality: the relative preference for higher priced/higher quality products over lower priced/lower quality products increased as the subjective correlation increased. For some pairs, the correlation between price and quality created a preference reversal across contexts: the higher priced/higher quality product was chosen over the lower priced/lower quality product in the higher correlational context, but the lower priced/lower quality product was chosen over the higher priced/higher quality product in the lower correlational context. An additional study provided evidence that the price-quality correlation affects reference price, rather than reference quality, formation. Copyright 1998 Academic Press.

Author-supplied keywords

Cite this document (BETA)

Readership Statistics

38 Readers on Mendeley
by Discipline
63% Business, Management and Accounting
16% Psychology
8% Economics, Econometrics and Finance
by Academic Status
24% Student > Ph. D. Student
21% Student > Master
16% Student > Bachelor
by Country
11% United States

Sign up today - FREE

Mendeley saves you time finding and organizing research. Learn more

  • All your research in one place
  • Add and import papers easily
  • Access it anywhere, anytime

Start using Mendeley in seconds!

Sign up & Download

Already have an account? Sign in