The halo effect of high-end models in the jewelry industry

Abstract High-end models form the brand’s core value, influence its basic models. This study examines the integrated pricing mechanism by which the halo effect from high-end models in the jewelry industry influences both the list, secondary market prices of basic models. List prices were analyzed using multiple regression on basic models of bracelets from 28 brands. Secondary market prices were assessed using qualitative comparative analysis on basic models across all product categories. The results indicate that the list prices of basic models of bracelets are linked to the presence of high-end model offerings, the diamond carat weight. Offering high-end models is associated with an increase in list prices of about JPY 280, 000 (approximately EUR 1, 500). Additionally, brands whose basic models trade at secondary market prices that are above their list prices are those that offer high-end models, do not operate outlet stores. This study suggests that producing high-end models, although seemingly contrary to economic rationality, is linked to increased profitability, brand value. This study contributes to the literature by conceptualizing the halo effect as a cross-industry pricing mechanism, extending its applicability beyond technical value-driven sectors to aesthetic-value-driven markets such as jewelry.