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Influence of Price on Perception of Art

Namgyal Karmartsang, Kyle Andrews, Thuha Nguyen

ABSTRACT:
What gives objects value? Is it the inherent usefulness of the object? Or is it the
price that is paid for it? Does a higher price increase its value? These are the questions that
we set out to examine in our study. We tested the effect of price, specifically related to art,
something which has little inherent usefulness. We designed a three surveys, two
experimental, and one control. The surveys were given to Portland State University
students. Each survey was identical, save for the three paintings, which had either no price
(control), a high price, or a low price. Individuals were asked to rate each painting on a
scale of 1-5 in three categories, which was compiled into composite score, which was used
for statistical analysis. A total of 29 responses were gathered.
The results of our survey showed that between the high price group and the control
there was a P-value of 0.06. We decided this was a reasonable threshold for rejecting the
null hypothesis, but we are inconclusive about our hypothesis, a result of having a large
enough sample size. The impact of our small sample is seen in our confidence intervals.
Our study supports the notion that a higher price will lead to a higher reaction to a piece of
art, but does not prove our hypothesis is true, only that it is unlikely we would get our
results if price had no influence at all.
INTRODUCTION:
In order to understand more about the relationship price has with quality, similar
studies had to be looked at to see if there was anything established already. Most other
studies come from the field of marketing and business and mainly focused on how price
would affect a consumers reaction to a product. Several such studies are outlined here in
order to provide the context of previously established price/quality relations.

Leavitt (1954) found that when the quality of a product is uncertain, consumers
tend to choose a higher priced brand. In his study, subjects were asked to choose between
two brands that they knew nothing about, each given a price. Brand A was given a lower
price; Brand B was given a higher one. Afterwards, the subjects were asked whether they
felt satisfied or doubtful about their choice. This was repeated for a number of household
supplies, such as floor wax, razor blades, moth flakes, and cooking sherry. It was found that
the items with the higher prices were chosen more often, with 57% choosing the higher
priced floor wax. The other items had different results, such as 30% choosing higher priced
razor blades, 24% choosing higher priced moth flakes, and 21% choosing higher priced
cooking sherry. The items were also ranked in order of their quality difference, with floor
wax and razor blades having the greatest difference in quality. Leavitt (1954) concluded
that people believe that different brands of certain items are of equal quality, while others
have different quality across brands. Individuals are more willing to choose a higher priced
brand if they believe there is a big difference in quality.
Tull (1964) attempted a similar experiment, replicating most of it with some
permutations, such as the differences between men and women, age groups, and level of
education. First, subjects were given a survey where they were asked about 20 household
items and whether they would classify two different brands of the same item as similar to
varying degrees. It was found that the brands of table salt and aspirin were the most
similar, and the brands of floor wax and liquid shampoos were the least similar. Subjects
were then asked to choose a product based only on its price out of several choices. In this
experiment, subjects were given a reference price, meaning the cost of the brand they
usually buy. It was found that for the similar brands products, the subjects were less
likely to buy the higher priced brand. However, when the product was a dissimilar brand,
they were more likely to buy the higher priced brand
The generalized relationship between price and quality was further researched by
Gardner (1971.) In an experiment three products typically purchased by college students
were labeled and assigned a price. Toothpaste, a mans shirt and a suit were all presented

either branded or unbranded with three different price variations; average, high and low.
The subjects were then requested to make an estimate of quality based only off of price and
brand. The results of this experiment determined that there was not significant evidence to
conclude that there was a generalized relationship between price and quality, but it did
note that the brand name was highly influential in the perceived quality. Subjects often
favoring to buy brand names over the higher priced products. This experiment however
differs from our as it is testing the subject willingness to buy. Our own experiment tested
the opinion alone, not willingness to buy. Seeing as our study was only based on perceived
value, we believed that price would have more of an impact.
Price is often examined in the willingness to for a consumer to purchase something,
the actually influence of the perception of quality is trumped by the prices influence on
purchases. As our study was not about the likelihood of a purchase, it is important to look
at price so that it serves as an indicator of quality, which occurs with far greater frequency
than is generally believed. In Gabor (1966), subjects were given a square foot of wool
carpet that was presented as different prices, the lower prices deterred subjects from the
carpet, while mid to high prices intrigued. The carpet was the same, concluding that the
value of the carpet was trusted more than the subjects own senses. When not studying
consumer behavior, instead only perceived quality, Gabors experiment supports our
hypothesis of the relationship between price and quality. Because our study is rare in that
is examining prices effect on something other than consumer behavior we were able to
explore its true effects on perceived quality.
Monroe (1973) provides further evidence of the influence price has on quality by
examining when the only differential between products was price, there was a positive
price-quality relationship. While in most of the studies cited, Price is not the dominant cue
for quality but that is only noted because the worry of cost that a consumer has. Higher
prices are perceived poorly in the average marketplace only because it is being seen as not
the best financial decision for the consumer. Looking at single cue studies like Monroes,
we had reason to believe that price will have great effect on the perception of the quality of

art, especially when elevating the possibility of the subjects seeing the price negatively in
reference to utility. When evaluated through single cue market studies this has been a
consistent result, and with that understanding we hypothesized that the price will have
great effect on opinion of art just as it has had in the marketplace.
While the studies we referenced prior to our research mainly deal in market studies,
the way price effects opinion alone is evident especially in the cases of Gabors experiment.
Price research is predominantly driven by the likelihood of consumers purchases, but
because our study was not testing for this we were able to extract information from single
cue studies to support our hypothesis. While most studies have found that price does not
influence buyers behaviors, but when the price is the only differential it does have an
effect on senses. Gabors rug sample study demonstrates just how much price can influence
senses. If cost could change the way consumers perceived the quality of a rug influencing
their perception of how the rug felt to touch, then we believed that price would have a
similar effect on individual's opinion of artwork. While we were not testing for behaviors of
consumers purchasing art, we were strictly looking at price as an agent to influence the
perception of quality.
MATERIALS & METHODS:
Our study is to observe how the reaction to a piece of art changes when given a
higher price. Our hypothesis was that when given an increased price, people will have a
more positive reaction to the piece of art. The null hypothesis was that price has no effect
on how people will react to it. For this experiment we used college students at Portland
State University for our sample group, to reflect the overall PSU population, rather than
Portland adults or adults in general. The reason for this is that we believed that students at
PSU may be more likely to have a background in art that would not reflect adults in
general. The response variable was the persons response to the art, reflected in a
composite score. The explanatory variable was the price given. Our surveys were
distributed through PSUs website and Facebook.

Our data was collected through three different surveys, included in the appendix.
One survey gave no information about price, one with a high price, and one with a low
price for the painting. In order to test how well the art is received, each survey had three
different paintings for the subject to rate in three categories on a scale of 1 to 5. The score
for each painting was then composited and recorded. These composite scores were then
used for statistical analysis. These surveys also included a number of baseline questions
about art, questions unrelated to our study. This was done in order to conceal the
importance of the paintings ratings.

RESULTS:

Table 1, Survey Results


Figure 1, Control Group Score
Figure
Distribution
2, High Price Group Score
Figure
Distribution
3, Low Price Group Score Distribution

In our study, we collected a total of 29 surveys, split between one control and two
experiment groups. 7 responses were received for the control, with 3 and 19 for the high
and low price groups, respectively. These responses are recorded in Table 1. Figures 1, 2,
and 3 show the distribution of the scores for each tested group. The results were used to
find the statistics found in Table 2, which reports a mean of 11.00 for the control group,
12.00 for the high price group, and 10.81 for the low price group. The standard deviations
were calculated to be 1.09 (control), 0.88 (high price), and 0.51 (low price). The standard
error of the mean for each group was found to be 0.36 (control), 0.51 (high price), and 0.12
(low price). A five-number summary for each group is included in Table 2, and presented in
Figure 4.
In Table 3A, the difference between the sample means were calculated between the
control group and the high price group,
the control group and the low price group,
and the low price group and the high
price group. The differences between
the standard error of the mean is also
recorded, which was used to create

Table 4, Confidence Intervals


the 95% confidence intervals shown in
Figure 5. The differences in sample
means and the differences of the
standard error were then used to

Table 2, Descriptive Statistics

generate the test statistics found in

Table 3B, at 1.60 (high-control), -0.50 (low-control), and -2.28 (high-low). The P-values were
calculated from this, showing 0.06 (high-control), 0.31 (low-control), and 0.01 (high low).

Table 4 describes the confidence intervals. From our control group we can say with 95%
confidence that the true mean of the population is 0.36. The high price 95% confidence
interval is 0.51. The low price 95% confidence interval is 0.12. These results are visually
represented in Figure 6.

DISCUSSION:

Figure 4, Five-Number Summary Box and Whisker Plot

Figure 6, 95% Confidence Intervals

Figure 5, 95% Confidence Intervals for the Difference in Means


Our P-values report that there is not a significant difference between the low price
group and the control. Between the high price and control group, a P-value of 0.06 was
calculated, only slightly above our designated significance level of 0.05. Between the high
and low price groups, our P-value was well beneath that threshold at 0.01. While this would
suggest we would only be able to reject our null hypothesis between the high and low price
groups, saying it is we would likely get these results given the null hypothesis is true, there
are other factors to consider. Looking at Figure 5, we can see that the control-low
difference and the low-high difference include 0, which suggests that they are not

significantly different. The control-high confidence interval, however does not include 0,
which suggests there is a significant difference. Combining this with our P-value between
the high and control group, both pieces of evidence suggest we can reject the null, as long
as we can accept that at 0.06 the difference is significant.
However, this still may not be an accurate representation of our population, given
our low sample size in our control and high price groups, relative to the low price group.
With a larger sample size, we would be able to reduce our confidence intervals, possibly to
the point of showing a significant difference between the control group and the low price
group. While our statistics do suggest there is a significant difference between the high and
low price groups and between the control group and high price group, in order to prove
our hypothesis, we would need to show that there is a difference between the control group
and the low price group, although the difference would likely be small.
Comparing our study with others that tested price relationships, we can see where
our results might fit in within their own studies. Consider Leavitt (1954), where it was
found that a consumer would only be more willing to choose a higher priced brand if they
believed there was a large difference in quality between brands. Given the subjective
nature of art, it is reasonable to assume that people will perceive a large difference in
quality. Although we didnt test for consumer behavior, it is possible that ranking a painting
higher would also alter their willingness to purchase the piece.
Gabor (1966) was able to determine that a higher price made consumers believe a
wool carpet was of a higher quality, based off their sense of touch. If a higher priced carpet
can fool the mind into believing it to be of a higher quality, our study might have been able
to prove a piece of art has a similar effect on the sensory information from the human eye.
However, we cannot truly draw this conclusion from our study, as ours is not about
consumer behavior. With adjustments and further research, we may be able to better
understand the relationship between price and perceived quality.

CONCLUSION:
Our data did lend some evidence to our hypothesis, but it is far from being proven.
There are still significant findings related to art which could be useful to understand
factors that people might not consciously take into account when judging something as
subjective as art. Since we only tested one of these factors, the influence of price, there is
clearly much more work to do done. What we were able to accomplish was establishing
that it is statistically possible that price can have a positive influence on the way people
rate a piece of art.
REFERENCES:
Gabor, A., & Granger, C. W. (1966). Price as an Indicator of Quality: Report on an Enquiry.
Economica, 33(129), 43.
Gardner, D. M. (1971). Is There a Generalized Price-Quality Relationship? Journal of
Marketing Research, 8(2), 241.
Leavitt, H. J. (1954). A Note on Some Experimental Findings About the Meanings of Price.
The Journal of Business J BUS, 27(3), 205.
Monroe, K. B. (1973). Buyers' Subjective Perceptions of Price. Journal of Marketing
Research, 10(1), 70.
Tull, D. S., Boring, R. A., & Gonsior, M. H. (1964). A Note on the Relationship of Price and
Imputed Quality. The Journal of Business J BUS, 37(2), 186.

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