An experience good in economics refers to a product for which the consumer does not initially know the quality and value of the item, aside from the price tag. The good is usually a product such as a book or movie, and the value is discovered after consumption. A variant of experience good is a post-experience good, where the value is not entirely known even after consumption. A search good, in contrast, is a product such as a tool or plane ticket, for which the consumer knows the quality and value before consuming.
Of the many product types, an experience good is one for which the consumer does not know the value of the product before it is bought and used. These items are usually purchased for entertainment or as an impulse buy, and the buyer can only guess at the real value of the item before it is used. After using or experiencing the good, the consumer will know the true value of the item.
For example, a book is an experience good. There can be a shelf of books, all the same price, but the consumer does not know which ones are good and which are bad. After reading the book, the consumer should know if the book was worth the money.
Some variables can lead to an estimate of value before purchasing an experience good. If the consumer likes or knows the author, has skimmed through the pages, has read online reviews and has talked to friends about the book, then he or she may have an idea of its value. These variables help the consumer estimate, but he or she still will not know the true value until the product is consumed.
Post-experience goods go further than experience goods. With these products, the consumer does not know the true value of the item even after experiencing the good. Vitamins fit this description. Even after consumption, most consumers will not know whether vitamins are fulfilling their intended purpose.
In contrast to experience good products are search goods. These goods have a known value before they are purchased. For example, if someone buys a hammer, he or she knows what the hammer will be used for and how useful it will be. There are some variables that may increase or reduce this value, such as quality, material and color, but these variables are usually known before purchasing and consuming the product.