Price-quality heuristic
Also known as: Price-quality inference
If it costs more, we assume it must be better.
What it means
A mental shortcut in which consumers infer a product's quality from its price, treating a higher price as a signal of superior quality, especially when other quality cues are scarce or hard to evaluate. The inference is sometimes warranted, since price and quality are often positively (if weakly) correlated, but it can be exploited by simply raising a price to make a product seem better. It can even alter experience: people report stronger effects from a 'pricier' wine or painkiller that is in fact identical to a cheaper one. It matters as a driver of premium pricing, luxury positioning, and placebo-like marketing effects.
Examples
Told a wine costs $90 rather than $10, tasters rate it as better and even show more brain reward activity.
Given three quotes to fix a roof and no way to judge the work itself, plenty of homeowners pick the dearest, reading the price as a promise of competence.
Two moisturisers with near-identical ingredient lists sell at £8 and £48; shoppers who cannot parse the chemistry end up using the price as the ingredient list.
First described in Studied since the 1950s; Plassmann et al. (2008) on wine.