Quality - Price Relationship on the Clothes Market

The work is intended to estimate the relationship between the price and quality on the clothes market and obtain the method of quality estimation. In particular, the markets of Moscow and Milan are considered. The two most representative items in terms of quality were chosen: the black dress with long sleeves of medium length and a black cardigan with similar features. The reason for such choice is that these two items can be easily found in nearly any brand. The research included 90 brands of wide range from Terranova to Chanel. The expected result was to observe that the item’s price is proportional to its quality. The price is regressed on all quality indicators separately and the Reversed Quality Score is constructed, which is the sum of all indicators. Quality indicators are assigned value 0 if no defects present, and turn to 1 otherwise. The observed result differs from the expected one, as many expensive brands possess the low quality. Also common beliefs about the price difference and quality difference between Moscow and Milan were investigated. The results show, that average price in Moscow are greater than the average price in Milan for both items investigated. The quality of clothes in Moscow is estimated to be worse than in Milan.