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the price they have paid for the vodka, the amount of advertising they have seen telling them that the expensive vodka is superior and is drunk by sophisticated, in-the-know people, and even the fancy design of the bottle. We might agree that the Grey Goose bottle is prettier than the Smirnoff bottle, but that has nothing to do with what the bottles contain. Try comparing brands without any predisposition to think one is better than the other, and see what happens. The New York City artist (and blogger) Andrea Harner did just that. She and her husband, Jonah Peretti, invited over some friends in March 2006 for a blindfold test comparing Smirnoff to Grey Goose. Result: eight of sixteen correctly picked which was which. That’s exactly 50 percent, the same result you would expect from tossing a coin. Harner’s testers did much better telling regular Coke from regular Pepsi: 70 percent got the cola right.

Taste is subjective, and you might well conclude that the illusion of better taste is worth paying for. Or perhaps your palate is more sensitive than the palates of Ms. Harner and her friends. Our point is, simply, that higher price predisposes us to think that a product is better, even when it’s not. With respect to vodka, soda, or any other beverage, you can’t know for sure what really tastes better unless you do a blindfold test yourself. As Ms. Harner wrote: “The point is that this challenge was A LOT harder than people expected. A LOT. I dare you to give it a try.” At the very least, her test results suggest you could pour Smirnoff into a Grey Goose bottle and your friends would never know the difference.

The price-equals-quality fallacy is exploited by others besides the booze industry. Many second-tier private colleges and universities make sure the “sticker price” of their tuition is close to (or even higher than) Harvard’s, Princeton’s, and Yale’s, in the hope that parents and students will take the mental shortcut of equating price with quality. Consumer Reports magazine, which conducts carefully designed tests on all sorts of products from automobiles to toasters to TV sets, often finds lower-priced goods to be of higher quality than those costing much more. For example, in a comparison of upright vacuum cleaners on the magazine’s website in 2006, the $140 Eureka Boss Smart Vac Ultra 4870 was rated better overall than the $1,330 Kirby Ultimate G Diamond Edition or the $700 Oreck XL21-700. The Eureka was better than the highly advertised $500 Dyson DC15. Dyson claims that its vacuum “never lose[s] suction,” and maybe that’s true. But the independent testers at Consumer Reports found that the Eureka did a better job of cleaning carpets, at less than a third the price.

The mismatch between price and quality has been apparent for a long time. Back in 1979, the University of Iowa business professor Peter C. Riesz checked the Consumer Reports ratings of 679 different packaged foods over fifteen years. He found that the correlation between quality and price “is near zero.” In other words, price had very little if anything to do with quality; the cheaper product was the better one about half the time.

So don’t get spun by price tags. Shop around, and keep in mind that sometimes less expensive options are good enough, and in some cases just as good as the pricier alternative. It pays to check the facts.

Selling False Hope

Getting facts wrong not only can cost you money or get you in trouble with the law: it can put you in the hospital, or worse. Consider the harrowing story of a cancer patient named Chuck Hysong, of Hendersonville, North Carolina. According to his wife, Pamela, he’d been improving while taking a new medication prescribed by his oncologist. But at nine P.M. on April 12, 2002, he took a preparation called Optimizer ENG-C, sold to him by a man recommended by a relative who was skeptical of doctors and a believer in “alternative” medicine.

Mrs. Hysong says she had begged her husband not to take the “optimizer” preparation. For one thing, the man who sold it “told my husband that he has a 100 percent cure