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As a personal anecdote: when I eventually stopped growing taller (~19), I started purchasing clothing and outdoor gear that was a step up from the quality of when I knew that I'd grow out of things. While not universal, I did notice a definite uptick in the durability and comfort of most things. It's obviously possible that this was a placebo effect or maybe I'm nicer to my gear now, but I've certainly been getting more out of the expensive things.

The placebo effect appears to be massive, at least where it's been studied (wine, for example). I'm happy to admit that, as a general rule (coughjaguarcough), higher prices indicate better quality, I just don't think it translates into better value (again, as a general rule).

Sure, highly functional things, like shoes and a bed, probably warrant paying more even though the value isn't proportional. Paying 50% more for shoes that you wear 8 hours a day which are 25% better (comfort, health, style) makes sense to me. But jeans, kitchenware, cars, medicine, food, electronics..the list goes on and on where I feel that, again, in general, cheaper is better.

As studies have shown, money should be spent on buying experiences...not things. It's the trip to Spain that'll make you happy, not the $1500 DSLR camera that you use to take pictures while you are there.

I buy experiences by buying tools.

Owning $800 of camera equipment doesn't make me happy, but using it does. Looking at my Macbook Air doesn't make me happy, but writing code on it does.

A Jaguar doesn't get you to work any better, but as has been pointed out, driving even a BMW 330 is a hell of a lot of fun every day.

Totally disagree about "jeans, kitchenware, cars, food, electronics". All of those benefit greatly by quality (and thus cost). Medecine is a special case since so much cost goes into development (sorry, I don't believe you on the bulk of it being marketing).

Apologies, as seen by GlaxoSmithKline's recent $3 billion fine for illegally bribing doctors, you are also paying their legal fees for unethical practices. (1)

Also, the industry spends more on lobbying than any other industry (2)

According to a study by York University, they spend twice as much on marketing as R&D (3).

(1) http://www.guardian.co.uk/business/2012/jul/03/glaxosmithkli...

(2) http://www.usatoday.com/news/washington/2007-05-10-senators-...

(3) http://www.sciencedaily.com/releases/2008/01/080105140107.ht...

I was replying to this "R&D costs are 1/100th of total cost, with marketing taking the lion's share" which I do believe is inaccurate.

A trip to Spain is 50 hours or so of my life. Driving a cheap car easily exceeds 400 hours a year, for around ten years. I'd rather have a comfortable, well made car to drive in than a once in a life time trip. YMMV.

> The recent thread on memristors even highlighted that R&D costs are 1/100th of total cost, with marketing taking the lion's share.

I read that too, but what they meant was that development of an actual product costs Hewlett-Packard 10 times as much than the research of the underlying technology. And commercialization costs again 10 times more. "Commercialization" is a catch all term, of course marketing, but for the most part this means building factories, tooling and machinery. Ramping up production is difficult and binds tons of capital investment.

A $300 meal can be 10x better than a $30 meal. Most $30 meals are fine, but a $300 meal may be the best meal you have ever had.

The key word there is can. A $300 meal may be the best meal you've ever had, but spending $300 on a meal isn't a guarantee that it will be. Conversely, it's also possible that $30 meal could be the best meal you've ever had. Less likely, sure, but possible.

It reminds me of advice I've been given from friends who are really into wine: the difference between a $10 bottle of wine, a $50 bottle of wine, and a $100 bottle of wine isn't that the more expensive ones are better, it's that they're more likely to be good.

There is at least some evidence that an expensive bottle of wine tastes better because it's expensive. When the cost of the wine is unknown to the taster, the differences disappear.[1] And, when a wine is presented to the taster as expensive it is perceived as better than cheaper wines even when it is the same wine.[2]

[1] http://www.wine-economics.org/journal/content/Volume3/number...

[2] http://scienceblogs.com/cortex/2008/01/15/expensive-wine-tas...

Your first article, at least, comes with a strong caveat: "We ﬁnd that, unless they are experts, individuals who are unaware of the price enjoy more expensive wines slightly less." (emphasis added)

If you and I were to get together and agree on a certain aesthetic, and then we were to declare people who agreed with our aesthetic "experts", and then we were to test random people against our set of experts, our experts would agree with our aesthetic more often than the others.

That says nothing about peoples enjoyment. If people, experts or not, enjoy expensive wine more than inexpensive wine, they still enjoy it more even if their reasoning is flawed.

I'm not sure I understand what you're saying. You seemed to originally be claiming that there isn't an appreciable aesthetic difference between cheap wine and expensive wine, and that all wine is basically the same when you don't think about price ("When the cost of the wine is unknown to the taster, the differences disappear.")

But the article you provided seems to say that there is a difference between cheap and expensive wine - it's just that most people are not good enough to detect it. I think this is important because it invalidates the claim that "all wine is indistinguishable." There's a difference, it's just hard to detect, and the pros are better at it.

To return to the original point of the thread, though, wine actually is a pretty interesting example that complicates the original poster's point. The more you wine you drink, the more important it is to pay extra. It's not that the expensive stuff isn't better, it's just that you have to care a whole lot to appreciate the difference, so most people actually will be fine just getting relatively cheap wine.

That reveals more about the power of expectation and prompting than it does about wine. Any respectable wine or beer taster will do it blind, without knowing the cost or the make or anything. And their results are repeatable - I can't speak for wine, but with beer, there are licenses that you get by taking repeatable tests.

The best meals I've ever had were generally cooked by me or someone I know personally, and were shared with good friends or family. An outdoor BBQ 20 years ago. Christmas dinners. Camp meals backpacking. Mom's home cooking after workouts as a kid. Picnics out of doors.

I can think of maybe two or three restaurant meals that were memorable. The best of these a long long time ago with a girl I was very fond of, in a small rustic tavern. Expensive? No. But exquisite at the time.

I agree eating with people you love makes all the difference

This includes, occasionally, eating alone, if you love the right people.

Pizza sells for $6.50 at my local store, but I'm sure pizza stores would still exist if they were priced at $10 instead, except there will be less stores.

As you go up in quality, it gets harder and harder to scale because..., how many celebrity chefs can you find in a city? You might find a dozen, but it would probably be very expensive to get enough chefs to staff shops in every suburb.

Prices are a function of demand AND supply. It simply isn't possible to supply enough celebrity chefs at $30 a meal. If there was such a shop it will have a long line stretching out around three blocks every night.

You won't get 10 times better meal by paying 10 times more; It just means the price equilibrium is 10 times higher. There's nothing to it, I don't think it is intentionally "used by merchants to extract money from consumers". They price their products at a point to maximise profit, and that's all there is to it.

Be careful with that. Your "practical" reasons are not the same as everyone else's. For a financial consultant, a "practical reason" for owning a Mercedes is that it implies the owner is successful. That's exactly what you want your financial consultant to signal. From his perspective, he may be happy with the Focus, but knows that he won't get the same type of customers if they see him driving it.

I'd agree that consumer goods shouldn't be seen as financial investment. However, if anything was to increase in value it's likely to be well the known and high quality "classic" model because it takes a place in history and the company survives, not the cheap knock-off that no one will remember about or cares.

There is definitely some items where the article's argument holds true. Furniture is definitely one. I can buy a Stickley table (very expensive) and my great grandkids will be using it in their home. Clothing is another. Cheap clothing degrades very quickly where quality items can last many years.