They don't make them like they used to

My 30-year-old jeans were scrapped last year. I bought them in 1994 for $50 CDN. That was a bit of money then, but the jeans were a popular brand name with prestige and known to last. I wore them weekly if not daily all that time, so hundreds of times is probably a low estimate. I replaced them last year; same make and model. Still about $50. I wondered how can that be? Using an inflation calculator, all things being the same, they should cost about $100 today.

Due to my background, I rationalized it this way:

? Must be the increase in manufacturing efficiency over that time using improved production techniques, technologies and automation.

? Must be due to globalization where production has been outsourced to countries with lower labour costs.

? Could be a gain in economies of scale that benefits from bulk purchasing and production.

? Material costs may not have increased at the same rate of inflation.

? Increased competition is keeping margins and costs low.

By the way, my new one year old pair already has holes around the crotch area. And there you have it, these are not the same pair of jeans, the “quality” is not there. Jeans today have indeed changed significantly compared to those in 1994, reflecting shifts in manufacturing processes, materials, consumer preferences, and economic factors. Even though my old pair had excessive wear and tear, they still weighed more than the new pair.

One final thought. As I researched the changes in jean manufacturing I can across a psychological phenomenon, described as psychological pricing bias. Anchoring bias is definitely relevant here. People tend to rely on the first piece of information they receive about a price as a reference point. If a good pair of jeans costs $50 initially, a good pair of jeans always costs $50.

This cognitive bias leads people to:

? Use an initial price point as a mental reference

? Struggle to update their perception of value over time

? Unintentionally compare current prices to past prices without accounting for inflation.

Companies understand we don't always rationally adjust our price perceptions, but instead rely on emotional and cognitive shortcuts. Consumers are price sensitive and will not pay $100 for the same product today. Therefore, the vast majority of companies try to maintain the same price point over time, at the expense of quality or value for money. The design life is less, the product is disposable, not worth repairing or cannot be repaired. They don’t make them as they used to.