Irrational But Predictable: The Zero Price Effect in High School Students

Abstract

Standard economic theories suggest that individuals act consciously, rationally in their consumption. However, when a product becomes free (zero price), individuals' perceived utility increases disproportionately and this affects their informed decisions. In the literature, this phenomenon is defined as the “zero price effect”. The main purpose of this study is to reveal how high school students, as young consumers, are affected by the zero price phenomenon. The questionnaire, which was applied to 585 high school students within the scope of the research, consists of five categories: essential consumption, durable consumption, non-durable consumption, service goods and luxury goods. Ten consumer goods were selected with two questions from each category and each question was divided into case 1 and case 2. In case 1, the TL value of the products was given and a choice was made, and in case 2, the price difference of the products was kept constant, but an equal amount of discount was made so that the price of the cheaper product was zero. The survey data were analyzed in the SPSS program. According to the results of the normal distribution test, the first 8 questions were analyzed by “Independent Sample T-Test” and the 9th and 10th questions were analyzed by “Mann-Whitney U Test”. When the findings are analyzed, it is found that in service goods and luxury goods, students' demographic characteristics do not create a significant difference in their attitudes towards zero price. It was found that zero price affected students' preferences in essential consumption goods, durable consumption goods and nondurable consumption goods. This study reveals how young consumers are affected by zero price in which product group according to demographic characteristics.