Price-Quality Correlations in the Japanese Market

This study tested the consumer's rule of thumb, price indicates quality, in the Japanese market. The data source was the Monthly Consumers product testing magazine published by the Japanese Consumer Association. Spearman's rho correlations of price and quality ranged from +.87 to −.80, with a mean of −.06. The slightly negative, near zero mean correlation indicated that, on the average, price was a very poor indicator of quality. Among product categories, bicycles had the highest mean correlation, +.54; mean correlations for other product categories exhibited considerable variation. Comparisons of correlations within a product category, such as television sets or microwave ovens, revealed that a significant positive correlation at one point in time was not a reliable guide to the level of price-quality correlation for that product category at later points in time. Comparing results from this study with results from previous studies of Consumer Reports and Consumers Research reveals a smaller percentage of positive correlations and a lower mean correlation for the present study.