PRICE‐QUALITY RELATIONSHIP AND TRADE BARRIERS
Abstract
This paper presents some rather complicated empirical work employing econometric modelling to demonstrate the validity of a quite simple proposition: the use of a product's price as an indicator of quality is only justified when the market is free of trade barriers and other imperfections. It demonstrates that individuals are well aware of this fact, making use of price as a quality indicator only where trade barriers have not distorted prices. Thus, it is not possible to make very strong generalisations about the existence of a universal price‐quality relationship. The managerial implications of the findings are briefly discussed.
Citation
Johansson, J.K. and Erickson, G. (1985), "PRICE‐QUALITY RELATIONSHIP AND TRADE BARRIERS", International Marketing Review, Vol. 2 No. 3, pp. 52-63. https://doi.org/10.1108/eb008283
Publisher
:MCB UP Ltd
Copyright © 1985, MCB UP Limited