Published on November 10, 2025 11:59 PM GMT

Why aren’t all pencils the same quality, conditional on price?

When I go to a store to stock up on pencils^[1], I’m presented with an array of choices and lacking any indicators of quality, I choose any old brand. For some strange reason, the quality of the pencil will be a crapshoot. The lead inside might break easily, or it might not. The mechanism may get stuck after a month, or it may not. The eraser may be a flimsy thing unworthy of the name, or it might match a Staedler. Why?

Is a mechanical pencil not a commodity good, which should be fungible no matter the make? Like fruit, it should be of consistent quality. Wait.

Fruit is not of a consistent quality. Nor are laptops, or shoes or paper, or really any of the goods that pop to my mind. E.g. go buy 10 random types of laptops at the same price point, and I’m sure they’ll vary greatly in quality.

So we have a new mystery. Why are commodity goods not the same quality, conditional on price? (Another way to frame this mystery is: why does it pay to look for high quality in so-called commodity goods?)

I’m not talking about a high bar for consistent quality here. If most of the variance was explained by within brand-line variation, then a product would in my mind live up to the name of commodity good. But they don’t.

My guesses as to why have the following structure: 
1) Manufacturers mostly aren’t optimizing for functional quality, but for other traits. And when you are optimizing for one trait, the other traits you do not optimize take random values. Only the moderate pressures for quality prevent greater variance in quality. This explanation is dual to the next.
2) Consumers care about something other than quality.

2 reminds me of a question Robin Hanson raised: why is there so much diversity in modern products? Why hundreds upon hundreds of different kinds of phones instead of just a few? His guess is that consumers want diversity to signal their own differences from others, which is a high-status behavior now common because we moderns are status mad.

I think this theory has some merits. Certainly, it says why there should be lots of variance amongst brands. And if manufacturers mainly optimize for diversity, then functionality varying greatly makes some sense. At the most extreme ends of fashion, you have clothing that is already torn to shreds.

But I don’t think most people are signalling anything with their choice of mechanical pencils. Oh, some do, for example children who want dinosaurs on their pens. But that’s a different segment of the market. For all of us who don’t attach much care about the designs of their mechanical pencils, shouldn’t we get boring, reliable quality?

Still, it’s the best answer I’ve got. Stuff like “consumers just don’t care enough to do the research needed for quality” are question begging.

1. ^{^}

   I used to do this, but I’ve since remedied the problem by researching quality mechanical pencil brands. I’ve found the Pentel P205 0.5mm to be a worthy weapon with which to challenge Landau and Lifshitz.