Convariation Assessment by Consumers

Two experiments were conducted to investigate the effect of prior beliefs and information format on consumers' assessment of the relationship between price and quality for four frequently purchased grocery products. In these studies, consumers were shown sets of data, each of which presented ranks of 10 brands of a product category on price and quality. Contrary to prior research on illusory correlation, consumers' estimates of covariation were relatively accurate and unaffected by the availability of relevant prior beliefs about the nature of the relationship between price and quality for grocery products in general or by format manipulations that varied the ease or difficulty of processing the data. These findings are discussed in terms of the effect of detailed instructions, the availability of simple heuristics for processing rank-ordered data, differences between social and consumer perceptions, and the stages of consumer information processing most likely to be affected by prior beliefs.