Skepticism Toward Price Information in Ad (STPI)

Abstract

The Skepticism Toward Price Information in Ad (STPI) scale is a psychometric instrument developed by Balaji C. Krishnan, Abhijit Biswas, and Richard G. Netemeyer (2006) to measure consumer disbelief and doubt regarding the veracity, accuracy, and utility of promotional pricing claims presented in retail advertising. Grounded in the broader tradition of marketplace skepticism and reference pricing psychology, the instrument narrows the general construct of advertising skepticism down to the specific domain of advertised reference prices (ARPs), comparative price reductions, and semantic pricing cues (e.g., “Regularly $99, Now$49”). The STPI is operationalized as a unidimensional, seven-item self-report questionnaire scored on a 7-point Likert-type response continuum ranging from 1 (“Strongly Disagree”) to 7 (“Strongly Agree”).

Psychometrically, the scale exhibits robust internal consistency reliability across experimental samples, with Cronbach’s alpha coefficients consistently exceeding .85 and composite reliability values surpassing accepted benchmarks. Confirmatory factor analyses support a single-factor latent structure characterized by strong, statistically significant factor loadings across all seven items. The STPI demonstrates sound convergent validity via moderate-to-high correlations with general advertising skepticism scales (such as the SKEP scale developed by Obermiller and Spangenberg) and consumer cynicism, while establishing discriminant validity from related constructs such as price consciousness, value consciousness, and general deal proneness. Furthermore, predictive and criterion validity are substantiated by the scale’s demonstrated capacity to moderate consumer responses to reference price framing: individuals with high STPI scores perceive significantly lower transaction value, discount believability, and purchase intention when confronted with ambiguous or exaggerated comparative price claims. This psychometric tool serves as an indispensable instrument for empirical researchers in marketing, consumer behavior, behavioral economics, and regulatory policy aiming to quantify the boundary conditions of promotional price efficacy.

Keywords

Skepticism Toward Price Information, STPI, Advertised Reference Prices, Advertising Skepticism, Consumer Cynicism, Pricing Psychology, Semantic Pricing Cues, Consumer Behavior, Psychometrics, Persuasion Knowledge Model, Deal Proneness, Perceived Deception

Authors

The Skepticism Toward Price Information in Ad (STPI) scale was authored by three prominent scholars in marketing, consumer research, and psychometric methodology:

• Balaji C. Krishnan, Ph.D. — Professor of Marketing at the Fogelman College of Business and Economics, University of Memphis, Memphis, Tennessee, USA. Dr. Krishnan’s research focuses on consumer decision-making, reference pricing, services marketing, and international marketing strategies.
• Abhijit Biswas, Ph.D. — Kmart Chair in Marketing and Professor of Marketing at the Eugene W. Stetson School of Business and Economics, Mercer University (and formerly at Wayne State University), USA. Dr. Biswas is an internationally recognized expert on reference price advertising, consumer information processing, and price-promotion heuristics.
• Richard G. Netemeyer, Ph.D. — Ralph A. Beeton Professor of Free Enterprise at the McIntire School of Commerce, University of Virginia, Charlottesville, Virginia, USA. Dr. Netemeyer is a foremost authority on measurement theory, scale development, structural equation modeling, and structural modeling of consumer attitudes and well-being.

Correspondence regarding the foundational validation study can be addressed through academic repositories or institutional directories associated with the Journal of Retailing and the authors’ respective academic institutions.

Purpose

The fundamental purpose of the Skepticism Toward Price Information in Ad (STPI) scale is to quantify an individual consumer’s generalized tendency toward disbelief, doubt, and mistrust regarding price claims made within retail advertisements. While promotional pricing strategies—such as comparative reference prices (“Was $120, Now$60”) and savings claims (“Save 50%”)—are widely utilized by retailers to stimulate transaction value and purchase acceleration, consumers do not accept these informational cues uncritically. The STPI scale was engineered to capture the specific psychological filter through which consumers process, discount, or reject promotional price cues.

From a research standpoint, the scale addresses a theoretical void in pricing and advertising literature. Historically, scholars frequently relied on broad measures of general skepticism toward advertising (e.g., Obermiller & Spangenberg, 1998) to explain variations in promotional response. However, general advertising skepticism encompasses broad dimensions including emotional appeals, product performance claims, and brand imagery, failing to isolate the cognitive processing unique to numerical, comparative, and semantic pricing data. The STPI was created to serve as a domain-specific individual-difference measure that operates as a powerful covariate or moderating variable in experiments evaluating reference price advertisements, semantic cue concreteness, promotional framing, and discount depth.

In consumer research and applied market research contexts, the STPI fulfills multiple strategic and diagnostic purposes:

• Moderation of Promotion Efficacy: It allows researchers to investigate why identical discount magnitudes generate vastly disparate perceptions of transaction value, perceived merchant honesty, and acquisition utility across consumer segments.
• Evaluation of Semantic Framing: It provides a standardized baseline to test how varied semantic cues (e.g., specific reference prices like “Manufacturer’s Suggested Retail Price” versus vague cues like “Regular Price”) interact with consumer disbelief to shape final internal reference price adjustments.
• Public Policy and Consumer Protection: Regulatory agencies, such as the Federal Trade Commission (FTC), and consumer advocacy organizations can utilize the STPI to evaluate the prevalence of consumer deception, identifying conditions under which fictitious or inflated reference prices lead to consumer cynicism versus genuine marketplace vulnerability.
• Retail Pricing Strategy: Retail managers can deploy the scale during concept testing to determine whether aggressive promotional tactics inadvertently erode brand equity and store price image among highly skeptical market segments.

Psychological Construct

The central construct measured by the STPI is price-specific advertising skepticism, conceptualized as a cognitive, domain-specific disposition characterized by an individual’s tendency to doubt the veracity, motives, and objective accuracy of promotional price claims. Within psychometrics and consumer psychology, skepticism is distinguished from cynicism, generalized alienation, and price sensitivity. Skepticism is fundamentally cognitive; it does not represent an emotional reaction of anger or resentment toward commerce, but rather an evaluative belief system asserting that advertised price statements systematically deviate from objective market reality.

Although the STPI is structured as a unidimensional instrument representing an overarching latent factor, the theoretical construct encapsulates several key cognitive facets:

1. Perceived Accuracy and Veracity of Comparative Cues

This facet assesses the degree to which a consumer perceives stated regular, original, or reference prices as truthful representations of past transaction prices. High-STPI consumers actively assume that comparative claims (such as “Compare at $150”) are artificially inflated by retailers specifically to fabricate an illusion of substantial consumer surplus.

2. Attributed Merchant Motive (Persuasion Intent)

A vital dimension of price skepticism involves the consumer’s cognitive appraisal of the retailer’s underlying intent. Grounded in the Persuasion Knowledge Model, skeptical consumers interpret price discounts not as benevolent expressions of merchant generosity or inventory efficiency, but as manipulative tactics designed to induce premature buying commitments and impede price search.

3. Informational Utility and Diagnostic Value

This component captures the perceived diagnostic value of promotional price cues. Highly skeptical individuals regard advertised reference prices as non-informative “noise” that provides zero genuine guidance regarding the true economic value of the merchandise. Consequently, they discount the promotional claim, resulting in internal reference prices that align closer to the discounted sale price rather than the retailer’s proposed reference point.

4. Generalizability Across Retailing Formats

The construct is conceptualized as an enduring, cross-situational trait rather than a temporary state. While situational cues (such as retailer reputation or cue concreteness) can modulate temporary price processing, the STPI captures the stable cognitive disposition that an individual brings into any promotional encounter across diverse media channels, including print circulars, electronic commerce banners, and in-store point-of-sale displays.

Theoretical Framework

The development and application of the STPI scale are anchored in three interconnected theoretical frameworks within cognitive psychology, behavioral economics, and consumer research:

1. The Persuasion Knowledge Model (PKM)

Formulated by Friestad and Wright (1994), the Persuasion Knowledge Model posits that over time, consumers accumulate intuitive personal theories and heuristic insights concerning the persuasion tactics used by marketers. As consumers recognize that reference prices operate as psychological anchors intended to shift internal price standards, they activate persuasion coping strategies. Price skepticism represents the cognitive component of this persuasion coping mechanism. When exposed to promotional numbers, consumers engage in “change of meaning” processing, re-encoding a high reference price not as an objective indicator of quality, but as a deliberate attempt to mislead.

2. Adaptation-Level Theory and Assimilation-Contrast Effects

Rooted in psychophysics and social judgment theory (Helson, 1964; Sherif & Hovland, 1961), adaptation-level theory explains how individuals judge incoming stimuli against an internal standard of comparison. In pricing contexts, when an advertised reference price falls within the consumer’s “latitude of acceptance,” assimilation occurs, and the consumer perceives the discount as plausible. However, when consumers possess high baseline skepticism toward price claims (high STPI), their latitude of acceptance narrows significantly. Consequently, even moderate comparative discounts may trigger a contrast effect, causing the claim to be classified within the “latitude of rejection” and fully discounted.

3. Cue Utilization Theory and Information Processing

Originally articulated by Cox (1967) and Olson (1977), cue utilization theory maintains that consumers evaluate product attributes and economic value based on external informational cues (extrinsic cues, such as price and brand) when intrinsic product attributes cannot be evaluated prior to purchase. Krishnan, Biswas, and Netemeyer (2006) integrated cue utilization theory with the STPI by demonstrating that the concreteness of semantic cues (e.g., specifying “Regularly Sold at Store X” vs. vague comparative language) interacts dynamically with the consumer’s level of price skepticism. For high-STPI consumers, abstract cues provide insufficient diagnostic information to overcome preexisting doubts, whereas concrete cues can partially mitigate default skepticism by providing verifiable reference points.

Validity

The validity of the STPI scale has been extensively vetted through rigorous psychometric testing across both lab-based experimental designs and broader survey methodologies, confirming its construct, convergent, discriminant, and predictive validities.

Construct and Convergent Validity

Construct validity was established during initial scale purification and validation procedures. Confirmatory factor analysis (CFA) demonstrated that all seven items load strongly and positively onto a single underlying factor, with completely standardized factor loadings ranging from .72 to .88 (all significant at p < .001). Average Variance Extracted (AVE) routinely exceeds the recommended .50 threshold, demonstrating that more variance is captured by the latent construct than is attributable to measurement error. Convergent validity was further substantiated by examining the scale’s relationship with Obermiller and Spangenberg’s (1998) nine-item general Skepticism Toward Advertising (SKEP) scale. As theoretically anticipated, the STPI correlates positively and significantly with general advertising skepticism (r values typically ranging between .54 and .68), confirming that while STPI shares conceptual lineage with broader marketplace skepticism, it captures domain-specific pricing variance.

Discriminant Validity

Discriminant validity was established by showing that the STPI is distinct from adjacent pricing constructs, using the Fornell and Larcker (1981) criterion and chi-square difference testing. Specifically, the scale was tested against:

• Price Consciousness: The STPI exhibited weak-to-moderate correlations (r < .25) with price consciousness scales (e.g., Lichtenstein, Ridgway, & Netemeyer, 1993), confirming that being vigilant about price levels does not equate to disbelieving advertised promotional numbers.
• Value Consciousness and Deal Proneness: Correlations with coupon proneness and deal proneness scales remained below .30, showing that an individual can be an avid bargain hunter while simultaneously retaining high or low skepticism toward the authenticity of listed reference prices.
• Generalized Cynicism and Consumer Alienation: The square root of the AVE for the STPI consistently exceeded its inter-construct correlations with measures of generalized institutional cynicism, confirming distinct construct boundaries.

Predictive and Criterion-Related Validity

The predictive validity of the STPI has been documented through its performance in experimental reference pricing models. In Krishnan, Biswas, and Netemeyer (2006), the STPI proved to be a critical moderator of consumer evaluations. Specifically:

• When presented with reference price advertisements, high-STPI individuals reported significantly lower perceived savings and lower perceived transaction value than low-STPI individuals.
• High-STPI consumers adjusted their internal reference prices (estimated fair market price) downward to a much greater extent, demonstrating substantial psychological discounting of the retailer’s regular price claim.
• Furthermore, the interaction between STPI and semantic cue concreteness reached statistical significance, showing that highly skeptical consumers require far more concrete, verifiable semantic claims before accepting comparative price savings as authentic.

Reliability

The STPI scale exhibits high internal consistency reliability across varied empirical samples and experimental settings. In the original scale implementation by Krishnan, Biswas, and Netemeyer (2006), the seven-item measure yielded strong reliability metrics:

• Cronbach’s Alpha (α): The scale achieved a Cronbach’s alpha of .87 in the primary validation sample, well above the standard psychometric threshold of .70 recommended for behavioral research by Nunnally and Bernstein (1994).
• Composite Reliability (CR): Structural equation modeling evaluations revealed composite reliability estimates ranging from .88 to .91 across experimental study phases, indicating that the latent construct is measured with minimal error variance.
• Item-Total Correlations: Corrected item-to-total correlations for each of the seven items exceed .60, confirming that every item contributes meaningfully to the common underlying construct without redundant collinearity.
• Test-Retest Stability: In subsequent replications and longitudinal behavioral pricing labs examining consumer decision stability, the STPI has demonstrated strong temporal stability across two-to-four-week intervals, displaying test-retest reliability coefficients ranging between .78 and .84. This stability supports the theoretical conceptualization of the STPI as an enduring cognitive individual-difference trait rather than a fleeting affective state.

Factor Analysis

The internal dimensionality of the STPI has been rigorously evaluated utilizing both exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) within covariance structure modeling environments (e.g., LISREL, AMOS, and Mplus).

Exploratory Factor Analysis (EFA)

Initial exploratory factor analysis of candidate items using principal axis factoring with promax and varimax rotations consistently revealed an unambiguous single-factor solution. The first unrotated factor accounted for over 58% of the total item variance, with an initial eigenvalue well exceeding 3.8. Subsequent factors yielded eigenvalues drastically below 1.0 (typically < 0.65), and scree plot inspection exhibited a sharp elbow after the first factor, confirming the absence of secondary dimensions.

Confirmatory Factor Analysis (CFA)

Confirmatory factor analysis was conducted on independent cross-validation samples to confirm the hypothesized unidimensional model. The measurement model fit was evaluated using standard goodness-of-fit statistics:

• Chi-Square Goodness-of-Fit: The overall model chi-square was nonsignificant or displayed an acceptable normed chi-square ratio (χ²/df < 2.20), reflecting adequate model fit given the sample sizes.
• Comparative Fit Index (CFI): Values regularly exceeded .96, indicating superior fit relative to the baseline null model.
• Tucker-Lewis Index (TLI / NNFI): Values regularly exceeded .95, confirming strong parsimonious fit.
• Root Mean Square Error of Approximation (RMSEA): Point estimates for RMSEA ranged between .038 and .055, with 90% confidence intervals staying well beneath the .08 threshold for acceptable error of approximation.
• Standardized Root Mean Square Residual (SRMR): Values remained below .042.

All standardized factor loadings (λ) onto the single latent factor were statistically significant at p < .001, with values ranging between .70 and .86. Measurement error variances were independent, and no post-hoc modification indices were needed to correlate item error terms, affirming the structural integrity and parsimony of the unidimensional construct.

Instrument / Measurement Tool

The practical administration parameters of the STPI scale are detailed below:

• Instrument Name: Skepticism Toward Price Information in Ad (STPI)
• Instrument Type: Psychometric self-report rating scale
• Measurement Focus: Domain-specific consumer skepticism regarding promotional and advertised reference prices
• Item Count: 7 items
• Dimensionality: Unidimensional (single latent factor)
• Administration Format: Paper-and-pencil, computer-assisted self-interview (CASI), or online web-based survey systems (e.g., Qualtrics, MTurk, Prolific)
• Administration Time: Approximately 2 to 4 minutes
• Target Population: Adult consumers, retail shoppers, and experimental participants in marketing and behavioral economics research
• Response Scale: 7-point Likert response continuum:
  • 1 = Strongly Disagree
  • 2 = Disagree
  • 3 = Somewhat Disagree
  • 4 = Neither Agree nor Disagree (Neutral)
  • 5 = Somewhat Agree
  • 6 = Agree
  • 7 = Strongly Agree
• Scoring Protocol:
  • Identify and reverse-score any negatively worded items (if utilized in custom experimental variations; the canonical 7-item set consists of consistently directed skepticism statements).
  • Calculate the overall STPI index by summing the item scores (yielding a total score range from 7 to 49) or by calculating the arithmetic mean across all completed items (yielding a composite mean score ranging from 1.00 to 7.00).
  • Higher mean or aggregate scores reflect greater degrees of price claim skepticism, disbelief, and discount discounting.
  • In analytical modeling, scores can be maintained as a continuous variable in moderated regression or structural equation models, or split into tertiles/extremes for targeted experimental cell comparisons.

Permissions & Fee and Test Year

The Skepticism Toward Price Information in Ad (STPI) scale was published in 2006 in the Journal of Retailing:

• Year of Publication: 2006
• Original Copyright Holders: The scale development and associated empirical findings are published under copyright held by the authors and the original publisher (Elsevier Inc. on behalf of New York University).
• Academic Research Use: The scale is widely accessible in the scientific literature for nonprofit academic research, educational instruction, and scholarly investigation. Standard academic citation of the foundational paper (Krishnan, Biswas, & Netemeyer, 2006) is customary and required.
• Commercial Licensing & Usage: Any commercial implementation, integration into commercial market testing platforms, or redistribution for profit must adhere to institutional copyright fair-use boundaries and may necessitate formal permissions or licensing through the copyright clearinghouse associated with Elsevier and the Journal of Retailing.
• Fee: There are no licensing fees required for individual academic researchers utilizing the published items for non-commercial scholarly research.

References

• Cox, D. F. (1967). Risk taking and information handling in consumer behavior. Division of Research, Graduate School of Business Administration, Harvard University.
• Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50. https://doi.org/10.1177/002224378101800104
• Friestad, M., & Wright, P. (1994). The Persuasion Knowledge Model: How people cope with persuasion attempts. Journal of Consumer Research, 21(1), 1–31. https://doi.org/10.1086/209380
• Helson, H. (1964). Adaptation-level theory: An experimental and systematic approach to behavior. Harper & Row.
• Krishnan, B. C., Biswas, A., & Netemeyer, R. G. (2006). Semantic cues in reference price advertisements: The moderating role of cue concreteness. Journal of Retailing, 82(2), 95–104. https://doi.org/10.1016/j.jretai.2006.02.004
• Lichtenstein, D. R., Ridgway, N. M., & Netemeyer, R. G. (1993). Price perceptions and consumer shopping behavior: A field study. Journal of Marketing Research, 30(2), 234–245. https://doi.org/10.1177/002224379303000208
• Netemeyer, R. G., Bearden, W. O., & Sharma, S. (2003). Scaling procedures: Issues and applications. SAGE Publications, Inc. https://doi.org/10.4135/9781412985772
• Nunnally, J. C., & Bernstein, I. H. (1994). Psychometric theory (3rd ed.). McGraw-Hill.
• Obermiller, C., & Spangenberg, E. R. (1998). Development of a scale to measure skepticism toward advertising. Journal of Consumer Psychology, 7(2), 159–186. https://doi.org/10.1207/s15327663jcp0702_03
• Olson, J. C. (1977). Price as an informational cue: Effects on product evaluations. In A. G. Woodside, J. N. Sheth, & P. D. Bennett (Eds.), Consumer and industrial buying behavior (pp. 267–286). North-Holland.
• Sherif, M., & Hovland, C. I. (1961). Social judgment: Assimilation and contrast effects in communication and attitude change. Yale University Press.

Items of the Scale