Why Expensive Goods Look Expensive

Why do expensive goods look expensive, and vice versa in most cases? Or are we just hypnotized into believing so by high price tags or brand names? As writing here sometimes, I’m not interested in buying and owning material things, but in investing, strangely enough. My main battlefield is the stock market, but once I researched “watch investment” to learn and be surprised at the price of super expensive watches, such as Patek Philippe, Richard Mille, etc. Some of them are priced more than several million dollars. Of course, I immediately understood I was out of place, though. Today, I didn’t mean to raise the question whether the price of such super luxury things is appropriate or not. My interest developed at that time was discovering the factors that make things look the part.

Even before making the research on watch investment, I had a decent knowledge about some famous watch brands, such as Rolex, Omega, etc., but, to be honest, I can’t tell the difference from their appearance between luxury and ordinary watches. If their brand names are not printed on the watch face, I’m sure they all will look the same to me. This may not be only due to my ignorance or lack of interest. For example, I’ve been playing the guitar for about 25 years, but can’t tell the price difference of guitars above a certain level. Even to me, however, the super expensive watches looked different, really expensive. I suppose it’s because I was able to see the watches obviously require a lot of time and effort to produce. As you can see in the above image, it’s like a very example of high-precision processed products.

Although writing ignorance or indifference should not be blamed, I have to admit a certain level of knowledge may be sometimes required. In summary, the reason why expensive goods look expensive is they have an appearance to obviously make people guess a lot of time and effort are required for production. According to this theory, the pricing of low-tech products like luxury wooden furniture is less likely to be understood, and so, I guess I have to continuously explain the factors affecting the price-quality relationship of products, such as joints without screws and gaps, the frame structure consisting only of curved lines (which makes it impossible to have a reference point for positioning workpieces), etc.

Shungo Ijima

He is travelling around the world. His passion is to explain Japan to the world, from the unique viewpoint accumulated through his career: overseas posting, MBA holder, former official of the Ministry of Finance.

Photo Credit: https://www.watchtime.com/blog/million-dollar-watches/3/

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