Credence Good

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.

BREAKING DOWN '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. Consumer Goods

    Products that are purchased for consumption by the average consumer. ...
  2. Private Good

    A product that must be purchased in order to be consumed, and ...
  3. Asian Century

    The dominant role that could be played by Asia in the 21st century, ...
  4. Auto Industry ETF

    An exchange-traded fund (ETF) that invests specifically in the ...
  5. Utility

    1. An economic term referring to the total satisfaction received ...
  6. Credit Repair

    Credit repair is the process of fixing a bad credit report, for ...
Related Articles
  1. Personal Finance

    What are Consumer Goods?

    Products that are purchased for consumption by the average consumer. Clothing, food, automobiles and jewelry are all examples of consumer goods
  2. Personal Finance

    How To Avoid Buying A "Lemon" Product

    A lack of information can lead people into bad purchases and bad investments. Find out how you can avoid these lemons.
  3. Managing Wealth

    Teaching Financial Literacy To Kids: Goods And Services

    It's important that kids understand how resources are used to provide goods and services, and how they are made, distributed, consumed and exchanged.
  4. Trading

    The Consumer Price Index

    Find out how this economic measure can help you make key financial decisions.
  5. Personal Finance

    5 Most Overpriced Car Repairs

    Doing these common repairs and maintenance tasks yourself instead of seeing a mechanic can save you a lot of money.
  6. Personal Finance

    Why Is Health Care So Expensive In The Us?

    The U.S. is the world leader in only one area of health care: costs. Why is it so hard to rein in these expenses?
  7. Investing

    What are Capital Goods?

    Capital goods are assets with a useful life of more than one year that are used for the production of income.
  8. Personal Finance

    Do This If Health Insurance Doesn’t Cover Your Bills

    Health insurance doesn't pay enough to help the millions of consumers who are drowning in medical debt. Are there any other options to soften the blow?
  9. Personal Finance

    Consumer Discretionary Sector: Industries Snapshot

    Discover the consumer discretionary sector, industries within this sector and companies producing goods that fall under the consumer discretionary definition.
  10. Markets

    Investing In Medical Equipment Companies

    Learn the basics about medical equipment companies and how investing in them can benefit growth and value investors alike.
RELATED FAQS
  1. How are industrial goods different from consumer goods?

    Understand the difference between industrial goods and consumer goods, and learn the different types of industrial goods ... Read Answer >>
  2. What is the difference between a capital good and a consumer good?

    Learn to differentiate between capital goods and consumer goods, and see why capital goods require savings and investment ... Read Answer >>
  3. Which economic factors most affect the demand for consumer goods?

    Understand how key economic factors such as inflation, unemployment, interest rates and consumer confidence affect the level ... Read Answer >>
  4. How does revolving credit differ from a general line of credit?

    Examine the consumer goods sector, which accounts for nearly one-third of consumer spending, and learn which goods account ... Read Answer >>
  5. What is the utility function and how is it calculated?

    Learn what the utility function is in microeconomic theory and how it is calculated based on a functional form that represents ... Read Answer >>
  6. What does marginal utility tell us about consumer choice?

    Learn how marginal utility influences consumer choice under the law of diminishing marginal utility and consumer decisions ... Read Answer >>
Trading Center