The Quality of Economic Output: Empirical Generalizations About Its Distribution and Relationship to Market Share

Abstract

As more nations add customer satisfaction—as a measure of quality of economic output—to what they presently collect about the economy, it becomes increasingly important to understand the role of customer satisfaction and its relationship to other economic measures. In an attempt to contribute to such an understanding, this paper presents two empirical generalizations about customer satisfaction. First, the distribution of customer satisfaction is negatively skewed. It is suggested that negative skewness is a condition for a free market. Second, the association between market share and customer satisfaction is not positive (and often negative) in cross sectional analysis. While challenging to firms that pursue both market share goals and increased customer satisfaction, the finding is consistent with fundamental economic theory and the strategy literature.