1. An international
marketer has said, “When political instability increases, the price of...

Question

1. An international
marketer has said, “When political instability increases, the price of quality
increases.” Think about the potential issues with measurements and data
collection. Is this a testable hypothesis?2.
. A few years ago, the
Food and Drug Administration issued a strong warning against Procter &
Gamble’s Rely tampon. The study of toxic shock syndrome (TSS) indicated that of
the 42 TSS patients, 71 percent of the women had used Rely tampons. What are
the causal implications concerning Rely and TSS?

David · Accepted Answer

1. An international marketer has said, “When political instability increases, the price of quality increases.” Think 
about the potential issues with measurements and data collection. Is this a testable hypothesis?
Ans. Good Institution and governance has been proxies by settler mortality rate. Political Instability too 
has to be proxied. Ideally, weighted average of economic inequality and human rights score(we could 
find the weights by a conditional regression) would do well now-a-days.
Consider  the  countries  of  the  world  which  are  most  politically  unstable.  We'd  find  abominable 
conditions of poor, who in turn aggravate the instability, and ruthlessness there-in. Both these proxies 
need to be tested and used.
                                              Data on inflation is easier to collect than data on, quality deterioration. No  
observer can determine, without bias, a deterioration in quality of a consumable, e.g. Jam, cooking oil, 
or why not biscuits. However, since the marketer was probably talking about the latter, and presuming 
that the experimenter has sufficient funds, the following method can be used.
Talk about products, segment them on durability, prices etc. 
Exclude the commodities which are already expensive, commodities that say, 95 per-cent of families 
can never afford. Mod-goods would fall into this category, they have prices already too high. Now, take 
consumables. Sample out a few brands from consumables. Look at the observed characteristics.

1. An international marketer has said, “When political instability increases, the price of quality increases.” Think about the potential issues with measurements and data collection. Is this a...

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