Figure 118 Oct 2026From “What is psychological pricing?”

The estimated effect of a $9 ending on new and established items

In both studies the estimate for new items was larger and significant, and the estimate for established items smaller and not significant.

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Figure 1The estimated effect of a $9 ending on new and established items

Source: Anderson and Simester (2003), Table 4, p. 101 (Study 2, Model 4) and Table 7, p. 104 (Study 3, Model 4, items without a Sale cue): coefficient of the $9-ending variable in a Poisson regression of units ordered, with item, catalog version and log price held constant. Standard errors: Study 2, new items 0.059 and established items 0.069; Study 3, new items 0.035 and established items 0.112. The authors read a coefficient as the approximate proportional change in demand (p. 98).

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A ASPE03-C4 New against established items (Figure 1): new items were generally introduced in the most recent season, established items in previous seasons; Model 4 coefficients, Table 4 (Study 2): new 0.218 (SE 0.059, p < 0.01), established 0.098 (0.069), footwear -0.397 (0.247), and Table 7 (Study 3, no Sale cue): new 0.085 (0.035, single asterisk), established -0.024 (0.112), footwear 0.077 (0.059), signs read from the page images; 22% against 10% in Study 2; no test of the difference between categories is reported, and approximate 95% intervals from the printed standard errors overlap in both studies (this guide's arithmetic, stated in the Figure 1 caption after G5 F5, where the dek and the conditions sentence now speak of estimates and name the category by season, not by familiarity); the coefficient is read as the proportional change in demand (pp. 93, 98, 100, 101, 104, 108): "the increase in demand was stronger for new items than for items that the retailer had sold in previous years"; "The new items were generally introduced in the most recent season, while established items were offered in previous seasons."; "A $9 ending yielded an estimated increase of 1.8 units or 22% for new items compared to 10% for established items."; "For the footwear items the result was difficult to interpret; the coefficient was negative but not"; "The findings also replicate the evidence in Study 2 that the $9 ending effect is stronger for new items than for established items or footwear"; "the percentage change in demand from using a $9 ending"; "The effect is stronger for new items that customers have seen less frequently in the past."Anderson & Simester (2003), QME · Anderson & Simester. (2003). Effects 9 Price Endings Retail Sales

Grades: A, verified against the printed page of the primary source · B, primary source, text layer only · C, authoritative secondary · D, reported.

From the essay

Pricing & revenue architecture

What is psychological pricing?

Psychological pricing sets a price's ending, often a 9 below a round number. In catalog tests it raised demand, with larger estimates for new items.

18 Oct 2026

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Isoglu, S. (2026). The estimated effect of a $9 ending on new and established items [Figure]. isoglu.com. https://isoglu.com/insights/exhibits/isoglu-2026-what-is-psychological-pricing-fig01/

BibTeX

@misc{isoglu-2026-what-is-psychological-pricing-fig01,
  author = {Isoglu, Sinan},
  title = {{The estimated effect of a \$9 ending on new and established items}},
  year = {2026},
  howpublished = {Figure 1, isoglu.com},
  url = {https://isoglu.com/insights/exhibits/isoglu-2026-what-is-psychological-pricing-fig01/},
  note = {From the essay {What is psychological pricing?}}
}

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    <img src="https://isoglu.com/social/isoglu-2026-what-is-psychological-pricing-fig01.png" alt="Figure 1: The estimated effect of a $9 ending on new and established items" width="3200" height="2400">
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  <figcaption>Figure 1: The estimated effect of a $9 ending on new and established items. Source: Anderson and Simester (2003), Table 4, p. 101 (Study 2, Model 4) and Table 7, p. 104 (Study 3, Model 4, items without a Sale cue): coefficient of the $9-ending variable in a Poisson regression of units ordered, with item, catalog version and log price held constant. Standard errors: Study 2, new items 0.059 and established items 0.069; Study 3, new items 0.035 and established items 0.112. The authors read a coefficient as the approximate proportional change in demand (p. 98). <a href="https://isoglu.com/insights/exhibits/isoglu-2026-what-is-psychological-pricing-fig01/">View exhibit</a>.</figcaption>
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