Sometimes you get what you pay for…

I had a lesson in economics recently, illustrated by a simple package of disposable razors.

The package on the left contains 8 Target brand triple blade razors.  It cost about $5.  The package on the right contains 8 Schick XTREME3 ComfortPlus razors and cost about $10.  I’ve been using the Schick razors for the past year, and decided save a few bucks by trying the store-brand razors.

The Schick razors cut cleanly, usually requiring only one pass, and are fairly clog resistant.  The Target razors clogged quickly, were difficult to unclog, and sometimes required five or six passes over the same patch of skin.  When I had finished, my face felt like I had used sandpaper to remove my stubble.  My experience with the store brand was so bad that after one use, I went back to the store and bought the Schick razors.  Needless to say, I’ll be paying the extra $5 from now on.

Here’s the ironic part: You probably can’t see it in the photo, but in the top-right corner of the Target package it says “Compare to XTREME3.”

Inferior Goods

This is an example of what economists call an “inferior good,” which is a cheap substitute for a more expensive, higher quality item.  When incomes rise, demand increases for most commodities.  Demand for inferior goods, however, decreases when incomes rise, because people with higher incomes no don’t have to settle for cheap crap.

I’m a big fan of getting more while spending less.  I rely heavily on open source software and freeware, and I usually buy store brands unless there is a compelling reason not to.  Sometimes, however, the cheaper product is so inferior that the resulting problems override any cost savings.

© 2008, Jonathan Johnson. All rights reserved.