What do pharmacists and bakers have in common?
They both overwhelmingly buy generic items related to their fields of study. Microeconomists have been studying for years why people would pay more for name brand products that legally have to have the SAME exact ingredients as their generic counterparts.
Freakonomics Radio ran a podcast entitled How to Save a Billion Dollars Without Even Trying. Stephen Dubner interviewed two microeconomists (Jessie Shapiro and Matt Getnzkow) about a paper entitled, Do Pharmacists Buy Bayer Aspirin?
To find the answer to these questions, they wanted to take a large sample of the population (tens of thousands of people) and track their shopping purchases related to whether they purchased generic or name brand items. They then wanted to interview these people to find out how knowledgeable they were about products. The findings were interesting. The more knowledgeable the person was about a product, the more likely they were to purchase the generic brand. Hence, pharmacists and other medical related personnel were much more likely to buy generic medicine and bakers were much more likely to purchase generic salt, sugar, and flour.
Because I grew up with my father working in the grocery industry, we were taught from a young age that most generic items were the same or better than the name brand. Often, the name brand companies produced the generic brands because they had the production equipment available.
After listening to this podcasts, I researched what items in general there was a consensus from experts and other that you should always buy generic, and which items you should probably pass. Here is the list.
Items you should buy Generic
- Sugar and Table Salt
- Electronic Cables
Items you should avoid buying Generic
- Paper Products
- Trash bags
- Diapers and Wipes
- Feminine Products- Remember My Dollar Store Debacle!!!
In conclusion, the easiest way to save money is to cut back on name brand products. Do we really need to pay 3X as much for Bayer Aspirin and the fancy packaging/ commercials or should we be ok with the plain (same capsule) found in the Walgreens box? I know it is very tempting to buy the name brand if it is on sale for $ 0.10 more because our mind tries to tell us we are getting better quality. Think about if we told our mind to stop playing tricks and we actually saved the $ 0.10 every time we went to the store. Over the course of our life, that can add up to some serious cash.
Our question for you, what are things that you will only buy name brand?