Once again, a company is making disingenuous claims about the pricing of its products. In a Hyundai television ad, the actor Jeff Bridges says, "We believe a safety feature like electronic stability control is too important to charge a premium for." So, is Bridges saying that Hyundai cars would cost exactly the same if they didn't have electronic stability control? It sure sounds like they are... but that can't be true.
The truth is that Hyundai, instead of offering electronic stability control as an option, has made it standard. As a result, the base prices for Hyundai's cars are higher. Don't believe me? Well, imagine if Hyundai decided to make gold-plated steering wheels standard, too. Do you think its base prices would be higher then?
No premium, my foot.
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Daniel Altman is a Harvard-trained economist who has been an economics columnist for The Economist, The New York Times and The International Herald Tribune. He is the author of three books and teaches a course on the future of the global economy at New York University's Stern School of Business.
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