On the validity of price knowledge measurements via self-assessment scales: Two studies in retailing

Price knowledge as a psychological construct has been one of the top behavioural pricing themes in the last four decades. Because the price of a product has a major influence on the buying decision, it is natural to focus on this issue. However, the broad range of aims of these studies, and the range of measurement methods for the construct, have produced differences in findings. Accordingly, in order to enable the practice to use at least some findings on price knowledge for marketing purposes, there is a need for more methodological research. In response to this need, our study aimed to prove the validity of the scales that are frequently used to measure price knowledge. We organised two studies employing two times two within the subjects’ factorial design. One factor addresses the method for measuring price knowledge (that is, self-assessment versus percentage absolute deviation (PAD)), and the other factor addresses the retail branch of our study (food versus clothes). In the food sample, we found two significant correlations between self-assessment and PAD. In the clothing sample, we found no such correlations. We conclude that care has to be taken when self-assessment scales are used to measure price knowledge.