The Social Life of Pricing: How Cultures Assign Value Beyond Economics

Prices look numerical, objective, and rational. However, anthropologists have long demonstrated that value is never simply economic. Rather, value is relational, symbolic, and cultural. How societies value, that is, how they price their goods, reflects their notions of fairness, identity, status, and morality.

In many product markets, "price" becomes a stand-in for "meaning." "Value signaling" is the term that anthropologists use to describe the notion that a higher price indicates not merely higher quality, but also membership in a cultural narrative of aspiration. People are purchasing more than merchandise. They are purchasing their position within a cultural narrative. However, discount cultures, such as outlet malls, fast fashion, and economy grocery stores, provide a different moral economy. In this system, being frugal is a positive value, with ‘getting a deal’ as a necessary cultural skill. Of course, this shopper may operate within both systems, switching identities as necessary.

Pricing: Cultural perceptions of work will be uncovered through pricing. In some cultures, tipping is considered a norm, as tipping is regarded as a form of acknowledgement. However, tipping is considered as undermining dignity. Financial value may be negligible, but its implication is huge.

Digital platforms create their own sets of tensions. Think, for example, of surge pricing. It may be economically sensible, but socially problematic. Such practices lay bare the economics of demand and supply in emergency situations like storms, or holidays, where people demand social solidarity, not precision. Unreasonable pricing will virtually always be perceived as unjust, regardless of its mathematical correctness.

Freemium models, for example, demonstrate the same. By providing a service for free and requiring payment for upgrades, the companies capitalize on the cultural knowledge that if this product was used, something must be given in return. Indeed, economics is not separated from anthropology, as seen in conversion rates.

Even within the organization, pricing helps form identity. Pay raises, as well as self-perception estimates, involve notions of assertiveness that come from culture. Two employees with exactly the same abilities may negotiate pay raises that give them entirely different salaries because they conduct the rituals differently.

An anthropological analysis of pricing involves recognizing that figures always mean more than figures. They are cultural texts. Figuring power (who sets the value), figures of worth (who can afford the value), figures of respect (what is respected as worth), figures of moral worth (what is moral) reside within them. Companies that do not factor in the cultural dynamics of pricing generate push-back, such as boycotts, mistrust, or damaged reputation. Companies that do factor in cultural dynamics of pricing develop models that meet social, not just

spreadsheet, norms.

Finally, the anthropology of pricing brings home the fact that markets are not mere economic systems. Markets are human systems that contain meanings, symbolism, and negotiations. Rather than merely representing value, prices generate value.