Credence Good

AAA

DEFINITION of 'Credence Good'

A type of good with qualities that cannot be observed by the consumer after purchase, making it difficult to assess its utility. Typical examples of credence goods include expert services such as medical procedures, automobile repairs and dietary supplements.

INVESTOPEDIA EXPLAINS 'Credence Good'

Credence goods that do not perform as expected can have adverse consequences ranging from financial loss to ill-health and even death. For example, the U.S. Food & Drug Administration has, over the years, prohibited a number of dietary supplements from being marketed, either due to misleading advertising claims by their manufacturers, or because they could induce serious side-effects.

RELATED TERMS
  1. Capital Goods

    1. Any tangible assets that an organization uses to produce goods ...
  2. Food And Drug Administration - ...

    A government agency established in 1906 with the passage of the ...
  3. Medical Savings Account - MSA

    A medical plan combining high-deductible medical insurance protection ...
  4. In-App Purchasing

    The purchase of goods and services from an application on a mobile ...
  5. Fast-Moving Consumer Goods (FMCG) ...

    These are consumer goods products that sell quickly at relatively ...
  6. Social Sentiment Indicator

    A measurement based on aggregated social media data that helps ...
Related Articles
  1. How To Avoid Buying A
    Budgeting

    How To Avoid Buying A "Lemon" Product

  2. What qualifies as
    Savings

    What qualifies as "goods" in cost of ...

  3. What qualifies as
    Fundamental Analysis

    What qualifies as "goods" in cost of ...

  4. What causes inflation, and does anyone ...
    Savings

    What causes inflation, and does anyone ...

Hot Definitions
  1. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  2. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  3. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  4. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  5. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  6. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
Trading Center