Ross Gittins is Sydney Morning Herald’s economy editor and is one of my favourite — he has the ability to decipher economy to a point that even a software guy like me could understand. He has written an interest article a few days ago on the Herald, titled The Uninformed Pay the Price. An very interesting article worth a read, and at the end he concluded:

When you use price as a guide to quality you are assuming other buyers are much better informed than you are and that sellers aren’t taking advantage of everybody’s ignorance.

Buyers would get better value for money if, rather than assuming prices are always set fairly, they put a bit more effort into being better informed.

However at the beginning of the article, he stated:

… buyers are often not nearly as well informed. That’s often because they don’t buy such items often enough — or the items don’t account for a big enough part of their budgets — to make it worth the time and effort it would take to be well-informed.

It is great to be informed and not pay the stupid price for crappy items from dodgy merchants. However it is assuming that the monetary equivalent of time and effort is less than the amount you can save for being informed. In reality it is not often the case — we only have 24 hours a day and they are valuable! Sometimes I wonder whether the two hours I spent making sure I am really getting the cheapest price is worth it, when I am only saving something like ten bucks.

How much time should I spend to get informed to justify my time and effort economically? That is the million dollar question.

That is why we have websites like OzBargain who members share the best deals around so you do not have to spend that much time finding them. That is why we have price comparison engines like staticeICE and ShopBot to save you time visiting each individual merchants. That is why we have Product Review and Epinions to keep you informed from other consumers’ experience.

Know your online tools, which make keeping-informed much easier. Get informed, and get better value for your hard-earned money.