Does a Dollar Get You a Dollar’s Worth of Merchandise? The Impact of Power Distance Belief on Price-Quality Judgments

Abstract

The role of cultural factors in influencing price perceptions is not understood well in the literature. The present research seeks to fill this gap by examining the link between power distance belief—the acceptance and endorsement of power disparities in society—and the tendency to use the price of a product to judge its quality, the underlying processes, and boundary conditions. Three studies show that consumers high (vs. low) in power distance belief have a greater tendency to use price to judge quality because they have a greater need for structure, which makes them more likely to discriminate between brands and rank them based on price. The relationships held regardless of whether the price-to-quality relation was assessed using a standard self-report scale or via actual product judgments, and whether power distance belief was measured or manipulated. The effect was found to be independent of self-construal, holistic thinking, and risk aversion, was mediated by a need for structure, and disappeared when the tendency to order was facilitated (impeded) by making price more (less) salient. Theoretical implications are discussed.