- 7 Ways to Build Your Credit Score Without a Credit Card
- A Simple Way to Invest Your Retirement Savings
- 8 Ways to Save on Life Insurance
- How to Get Started Investing When You Don’t Have Much Money
- Lower Your Cable Bill With Techniques A Hostage Negotiator Uses
- The ABCs of Selecting a Medicare Supplement Plan
In my story last month called 5 Tips to Save on Thanksgiving Dinner, I suggested that one way to dine for less is to serve boxed wine – adding that once it’s in a nice decanter, who’s going to know?
Sound overly chintzy? Turns out there may be some science that backs up that advice.
Individuals who are unaware of the price do not derive more enjoyment from more expensive wine. In a sample of more than 6,000 blind tastings, we find that the correlation between price and overall rating is small and negative, suggesting that individuals on average enjoy more expensive wines slightly less. For individuals with wine training, however, we find indications of a positive relationship between price and enjoyment. Our results are robust to the inclusion of individual fixed effects, and are not driven by outliers: When omitting the top and bottom deciles of the price distribution, our qualitative results are strengthened, and the statistical significance is improved further. Our results indicate that both the prices of wines and wine recommendations by experts may be poor guides for non-expert wine consumers.
If you think the abstract above is complex, you should leaf through the report – these guys did some serious research. But their conclusion offers additional insight – actually, proof – that consumers often mistake price and quality. Or at least enjoyment.
For a fascinating 25-minute Freakonomics podcast and more information on this topic, check out this story in The New York Times.