Price as a measure of quality?

First perspective: – Reality
If it is more expensive is it better?
Not always, it’s easy to find products that are similar and have different prices, like commodities as bleach. Bleach is basically the same; however you find different brands with different prices.

But, it’s common knowledge that usually better products and better services tend to cost more in production and providing (better materials or better human resources tend to cost more).

Second perspective: – Perception
Customers make associations and define the brand positioning according to different factors, and one of those is the Price.

Usually, customers have limited knowledge about the service and product they intend to buy, even if the information is available, most customers don’t expend must time researching for more information about products like soap, toothpaste or others.

So, most customers tend to make a mental shortcut to optimize their time, and associate Price with quality, assuming that if it is more expensive, it’s better.

What effect rebuilding the U.S. infrastructure will have on the U.S. economy?

The effect of rebuilding will be positive in U.S. Economy, however the effect will not be as huge as most think.

This type of economic strategy was developed by Keynes that defended the interventionism role of the government in the economy. As you all know the U.S. President Franklin Delano Roosevelt, applied Keynes strategy also known as “New Deal” between 1933 and 1937 with the purpose of recovering U.S. Economy following the stock market crash in 1929.

The “New Deal” in short terms was a government investment plan to reduce and control agriculture production, regulate the financial markets and specially, introducing a huge government investment in public infrastructures. As you all probably know FDR’s “New Deal” was a success.

However in the 70’s following the world economic crisis originated by the oil embargo to the U.S. and to some European countries, similar strategies of the “New Deal” were implemented in the U.S. and in Europe, but this time without success. It was the end of the magic formula to recover economies.

So, we learn from the past that:
- Government investment in infrastructures stimulates positively the economies.
- Full economic recovery usually depends of more factors that only government investment.
- Before a strategy implementation, it is mandatory to analyze the economy and identify the origin and weak spots of the economy, to design an economic strategy with chances of success.