Reply To: changes in the quality of goods over time


To piggyback on Dr. Herbener’s point about inflation, I once listened to Peter Schiff describe two methods of “hidden inflation” on his radio show, changes in quantity and changes in quality.

Generally speaking, consumers are most sensitive to and more aware of the price of a product rather than the quality of parts or even (in the cases of grocery items) the amount of product in a container. If a company finds that its costs are rising, one might assume they will simply raise the sale price of their product. But the consumers would immediately notice this, and it would upset many. So many companies simply choose to use lower quality inputs, reduce the quality of customer service, or charge the same price for less product (the infamous “grocery shrink ray”).