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The Cashebo Effect is a way to measure the relative placebo effects of brand names.
For example, it is often possible to buy either cheap or expensive versions of products. The Cashebo Effect measures whether people rate the more expensive product higher just because it's more expensive. The Cashebo
Effect is calculated as follows:
For two versions of a product, one made by PoshDosh Inc. and the other by CheapasChips Corp., you conduct four tests.
Test 1: Users are told they are using the PoshDosh version. They are.
Test 2: Users are told they are using the CheapasCheaps version. They are.
Test 3: Users are told they are using the PoshDosh version. But they're using the CheapasChips one.
Test 4: Users are told they are using the CheapasChips version. But they're using the PoshDosh one.
Appropriate data is gathered (e.g. quality of hi-fi, tastiness of toast).
The Cashebo Effect for the PoshDosh version is:
Cashebo Effect = Average score in Tests 1 and 3 - Average in Tests 2 and 4
The Cashebo Ratio for the CheapasChips version is the opposite.
Products which people rate highly just because of the brand name would score highly on the Cashebo Ratio. A score close to 0 means the brand name does not sway people's perceptions either way relative to the other brand.
(For some products the difference might be due to other causes, e.g. marketing gumpf: "PoshDosh cables infra-magnetically transmutate the electricity going into your stereo, giving you a crisper, clearer, minty-fresh sound.")
We can also calculate a Real Difference showing the real difference in performance:
Real Difference = Average score in Tests 1 and 4 - Average in Tests 2 and 3
People seeking objectively better products will choose products with high Real Differences and not fork out extra cash for products with high Cashebo Effect alone.
(On the other hand, some people might actively choose products with high Cashebo Effects because they want to gain the admiration of others: "Wow, is that a PoshDosh stereo?")
Because of the cost of doing the trials, the Cashebo Effect would probably be calculated for four types of products:
1: Expensive products e.g. hi-fis
2: Products where there's a big price difference between brands e.g. some hi-fi cables can cost over $1000 more than others
3. Brands which are suspected of talking cobblers about their products e.g. Magnoferrific Cat Health Bracelets
4. Products which matter greatly to people e.g. toast - where anything that can help us get closer to complete and toastal satisfaction is a good thing.
To some extent this already happens on an ad hoc basis (e.g. the Bad Science columns in The Guardian) but having a website where people can access this information for whatever type of product they are interested in, and a standardised testing method to measure the Cashebo Effect, would be a great step forward.
Transparent Audio Opus MM loudspeaker cables
http://www.aurant.c...ignaturefeature.php
At $30,000 a pair, they'd better sound gooooood... [wagster, Apr 26 2006]
Placebos work better when they cost more
http://www.guardian.../05/medicalresearch
A relevant research study [imaginality, Mar 07 2008]
[link]
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Is this a re-expression of utilitarianism? |
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Nope, more an attempt to distinguish the subjective and objective aspects of perception as applied to consumer products. |
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This would be an interesting test of a product's price to value ratio, it would be great if people like Which magazine would run some of these. They could start with Transparent Audio speaker cables (link). |
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This would be an interesting study for sure. I tried to find one done for marketing students and I think I found a couple of sites that have done this kind of study. Of course they were all locked up and you either had to pay for the info or be part a some secret marketing cult ( granted my searching abilities are not what you would call my forte). This would be a good thing to do in conjunction with Consumer Reports, as they already do the product testing part. |
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This is done every day at your local car dealer. Chevrolet/Cadillac Toyota/Lexus are basically the same vehicles with different badges. |
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The effect is well known - a good that attracts higher demand when its price rises (since it is perceived to become better) is called a Giffin Good. |
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I like the structure of the study you're proposing as it would give a quick, muddy, quantitive guide to a good's behaviour. |
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On the flip side I suspect that more qualitative data would prove useful to economists - e.g. why an effect was measured, if any, for each type of good and so on. Tie your rating system to a well structured questionnaire and you're away. |
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As with [NTSS] I couldn't pick up a link of anything similar, and I simply drank/slept too much to remember the economics half of my bachelors to be able to say if similar studies already exist. [+] |
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//Which magazine has done this for decades// |
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Which Magazine, like many others, regularly produce product comparison charts based upon a number of comparable factors, but to the best of my knowledge it hasn't regularly run structured randomised control trials on products rebadged to hide their real manufacturer, which is the method behind the measurements proposed here. |
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I don't think this idea has legs when it comes to providing meaningful information for consumers interested in particular products (could we really run RCTs on everything for sale out there?), but it might be useful as a rough analytical tool, based on a carefully selected set of products. |
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Consumer reports does single blind testing of a myriad of products. Probably they have some sort of database you can access (I assume). |
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//Chevrolet/Cadillac Toyota/Lexus are basically the same vehicles with different badges.// This may surprise Americans, but in the UK: Chevrolet/Daewoo Toyota/Lexus are basically the same vehicles with different badges. |
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Daewoos are sold with the Chevy nameplate here. |
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//Is this just a snob test ?// |
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Yes, I'd say it is, which in itself could still be useful if done right - it might find trends that don't appear in standard market research/blind testing. |
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I might be reading too much into it, but I think most testing out there tries its best to measure actual value for money, whereas this would try to measure perceived value for money. |
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On the car thing, late '90's Ford Fiesta versus Mazda 121, numerous people carriers (VW/Ford/Seat and Citroen/Fiat/Peugeot), and the UK is still badging Opels as Vauxhalls, presumably to keep the name alive. |
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But then talk of cars opens up another aspect to this idea, which is that a good is more than just physical - there's the after sales service to tie in, which could skew the measurement if people rate what they believe to be a PoshDosh Inc product higher because PD Inc provide better support. |
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More evidence of the effectivness of cashebos - I feel much better when someone gives me a large amount of cash. |
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Edmunds.com rates cars (for the US at least) using both an Editors' Rating and a Consumer Rating. If you don't mind interpreting the Editors' Rating as a fairly objective measure of quality, you can view the Consumer Rating as a measure of hype/cashebo response. |
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<!-- you can view the Consumer Rating as a measure of hype/cashebo response --> |
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Or, you can view it as a measure of how open consumers are about their post-purchase cognitive dissonance. |
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baked. widely known phenomenon widely studied & used by marketers. Interesting, but still widely known & used by those in the field, so [-] |
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Is there a unit for it, [soph]? |
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The Yankee? Or, more e-friendly, the Yank. |
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Another well known mechanism here is that once someone shells out serious cash for something, they know they'll sound like a fool if they say they spent a fortune on crap. |
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So, people tend to brag about the benefits of expensive items they just sunk their retirement on, and such bragging impacts future buyers & brand image. |
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