BUSINESS

Poor People Are Sometimes Much Smarter Than The Rich (In 1 Chart)

06/21/2013 03:57 pm ET

Just because an item is expensive doesn’t mean it’s actually worth more.

Try telling that seemingly obvious point to a rich person with a headache; they likely won’t believe you, a new study finds. Wealthy shoppers are more likely to spring for brand-name pain relievers for headaches than their poorer counterparts -- even though the cheaper generic medications are just as effective, according to recent research from the University of Chicago’s Booth School of Business.

Here's a chart that shows household income versus the likelihood of buying brand-name headache medicine:

headache chart

As this chart illustrates, the amount of money you make is one indicator of whether you'll choose to spend $6.29 on a bottle of Bayer Aspirin or spend $1.99 for the same amount of CVS-brand Aspirin. But as the researchers note, there are some other predictors as well. For one, consumers who are less educated about the active ingredients in a product are much more likely to be wooed by advertisers into buying the brand-name medication, the study found.

This trend apparently costs Americans big time. If shoppers stopped favoring brand-name headache medicines they’d spend $410 million less than they are now on the remedies, the study found.

Talk about a headache!

(Hat tip: The Atlantic)

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