Price Salience in Consumer Choices: A Deep Dive into Purchasing Behavior and Quality Perceptions

Published: 2024-01-19
Price Salience in Consumer Choices: A Deep Dive into Purchasing Behavior and Quality Perceptions
Type of paper:  Essay
Categories:  Business Behavior
Pages: 6
Wordcount: 1450 words
13 min read

This paper aims to satisfactorily evaluate how consumers' choice of purchase is affected by salience. Salience is the quality of being particularly outstanding among the surroundings. The concept of salience plays a significant role when a consumer chooses a product or service. When a consumer has to select a product from a context of somewhat same quality products, it differs in prices. Traditionally, economists have understood that consumers know the actual value of products, and any change in the final price for whatever reason will automatically change consumer choice (Blake et al., 2018). A recent study by Bordalo et al. has proven this assumption to be valid only to a particular extent. In this paper, we analyze the model by Bordalo et al. to show the effect of price salience on what consumers purchase can be very vital as to whether they will make that particular purchase.

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This analysis will focus on a simple model that illustrates the impact of price salience on consumption choices. The model concentrates on thoughts, field experiments, and data that has long proven to be unaccountable for standard models but can now be incorporated into one model. The model demonstrates that consumers were less concerned with prices; the prices of two commodities of different quality increased as expected. However, if the price increase is unexpected, the consumers become concerned, and the purchase probability goes down. Bordalo et al.'s model was advantageous because it offered a broad range of context-dependent options in risky and riskless environments. The model also provides a new perspective on how previous experience affects the consumer's valuation. In general, the model distinctively predicts new understandings into mystifying evidence in several applications (Bordalo et al., 2013).

The price salience of a commodity makes the consumers think of it as very valuable. The consumers, therefore, choose to purchase the product or service that stands out from its substitutes. Bordalo et al. (2013) present that a consumer selects a product that is known to stand out regardless of its price (804). Salience in products is, therefore, a determining factor in choices made by a consumer. A competing product of equal quality as salient could be left out on the counter just because the consumer prefers the latter. In the model presented by Bordalo, a salient bottle of wine was sold at different prices at different stores; however, the consumer still chose to purchase the salient bottle of wine (Bordalo et al., 2013). Salience could, therefore, be considered as the determining factor in product or service purchasing.

Additionally, consumers tend to think that products of higher prices offer the best quality. The human mind tricks consumers into thinking that the higher the price, the better the quality. Presented with two products with varying prices, most consumers chose the product at a higher price. The consumer does this by believing that the product with a higher price will serve them for a more extended period. According to Allcott et al. (2018), a highly-priced commodity is more significant in consumer purchasing (89). The psychological thought that price depicts quality aids in the high purchase of items with high prices. In the model by Bordalo, the consumer would rather part with more bills to purchase a product they believe is of the best quality based on the price tag of the product (Bordalo et al., 2013). Therefore, salience in the price of a commodity results in believing that the item is of the best quality.

As a result, price salience aids in the purchase of goods in the middle range of prices. Some consumers perform a quick analysis of the products or services they wish to purchase. Market prices of commodities vary with the production company. Some things are highly priced; others are priced in the middle, while some are lowly priced. Consumers might tend to think that products with low prices are of poor quality. The consumer might not be able to purchase a highly-priced commodity. Based on the price salience, the consumer will choose to buy an item that is not so expensive, nor too cheap. The choice is due to the thought that its quality is as good as the highly-priced product. Allcott et al. (2018) emphasize that commodity purchase choice might be influenced by the product's price, resulting in high purchases of goods with moderate prices (91). Companies that price their commodities with median prices might be more profitable than those with high or low prices.

As a keen analysis, an instance of a commodity's price rising drastically could result in the purchase of alternative things with lower prices. Bordalo et al. (2013) give an example of fuel; when the prices rise, consumers get forced to switch to alternatives (804). A sudden rise in the price of a commodity or service alters the choice of commodity purchase. Consumers prefer products and services that are affordable. A sudden change in the price of an item causes a change in its demand. Prices of products and benefits vary with the cost of production of the products. Therefore, an increase in production cost could affect a product's need as the market price could be high. Consumer choice could consequently change with the price of the products.

Price salience has a significant impact on the change in the quality of products and services. The products and services that are lowly priced work on upgrading the quality of their products. Upgrade on quality results from the misconception that the products with low prices are of poor quality. Blake et al. (2018) emphasize that changes in purchasing costs result from an upgrade in the quality of the products and services (16). Companies that have achieved the goal of upgrading their products' quality tend to increase their commodities prices. The pressure from consumers also leads to upgrades in the quality of items. A business's primary goal is making profits; price salience could affect this goal. As a result of the consumer conception, the effect is that goods valued at higher prices are of the best quality. The business management, therefore, calls on an improvement of their products. Product upgrade benefits consumers as they are assured that the products they choose to purchase are of good quality.

Also, price salience affects the quantity of production of products and services. Consumption choice could overwhelm the market of a commodity due to high demands. The increased demand calls for an increase in production. Increased production ensures that the things that are in tall order are always available in the stores. The move of an increase in production also assures that there will be less to no inconveniences. According to Blake et al. (2018), price salience could lead to a rise in the demand for a product or service hence demanding an increase in production (15). More consumers choose to purchase products at a great price, leading to a rise in demand. Therefore, the producers get led to produce more products and services as a result of high demand.


In conclusion, consumers choose to purchase the product or service that stands out from its substitutes. The consumers believe that such commodities are of the best quality and get tricked into buying them. The choice to purchase is due to the consumers thinking that higher-priced products offer the best quality. The price salience also aids in the purchase of goods in the middle range of prices. Consumers believe that goods valued at high prices are of exceptionally high quality, while those sold at low costs are of poor quality. An increase in price salience makes all products appear expensive hence a higher possibility that consumers will not buy the goods. Nevertheless, a percentage increase in price amounts to a higher price on expensive products; hence salience changes the price-quality tradeoff perceived by consumers. Therefore, consumers are encouraged to consume cheaper goods. Consumers could not purchase highly-priced commodities, which leads to the purchase of products from the next level. A commodity's price rising drastically could result in the purchase of alternative products with lower prices. Price salience affects the quantity of production of goods and services. An increase in demand caused by price salience leads to a rise in products and services. Additionally, price salience has a significant impact on the change in the quality of products and services. The pressure from consumers leads to upgrades in the quality of commodities.


Allcott, H., Lockwood, B., & Taubinsky, D. (2018). Ramsey Strikes Back: Optimal commodity taxes and redistribution in the presence of salience effects. AEA Papers and Proceedings, 108, 88–92.

Blake, T., Moshary, S., Sweeney, K., & Tadelis, S. (2018). Price salience and product choice. NBER.

Bordalo, P., Gennaioli, N., & Shleifer, A. (2013). Salience and consumer choice. Journal of Political Economy, 121(5), 803–843.

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Price Salience in Consumer Choices: A Deep Dive into Purchasing Behavior and Quality Perceptions. (2024, Jan 19). Retrieved from

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