Law of Diminishing Returns
Feb 28, 2009 at 10:59 PM Thread Starter Post #1 of 215

Nosoupforyou

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Even within the forums of our Head-Fi, where many can easily justify spending hundreds of dollars on headphones, there are whispers of something called the 'Law of Diminishing Returns' -- the point beyond which more money can only buys negligible improvements in sound quality... if any improvement at all.

Obviously, everyone who reads this will have their own subjective opinion, so I ask that you consider a case scenario: Joe. Joe represents someone we all know, who is on the verge of upgrading but has not yet.

Joe loves all genres of music, and has a decent set of earphones but is looking to upgrade. He has a musician's ear and can tell the difference between low and high quality compression, and has the capacity to realize that stock earbuds suck. His music is all encoded at moderate bitrate levels (192-256 AAC), so his source is quite good, but not the best. He is seeking new headphones, and is willing to spend as much money as he needs...

BUT ONLY IF IT IS WORTH IT. Bang-for-the-buck -- not the best of the best.

What would you say would be the maximum amount that Joe should spend (on headphones/ phone+amp/ any other extras) before the Law of Diminishing Returns kicks in, and it's simply a better idea to spend his money upgrading his source material or adopting a cat.
 
Feb 28, 2009 at 11:03 PM Post #2 of 215
FWIR and heard, diminishing returns starts to kick in at about $100-200 for headphones. There's a lot more difference between spending $100 and $200 than $1000 and $2000.

But if you can hear the difference and have the money to spend, there's no reason to always go for bang for buck. Audio is a purely subjective market and can't be simplified into some rule. There will always be exceptions.
 
Feb 28, 2009 at 11:08 PM Post #3 of 215
I don't care what anyone else does, but if I need an expensive amp to enjoy an expensive headphone more than I enjoy a cheaper phone, I'll take the cheaper phone every time.
 
Feb 28, 2009 at 11:12 PM Post #4 of 215
Quote:

Originally Posted by Emooze /img/forum/go_quote.gif
FWIR and heard, diminishing returns starts to kick in at about $100-200 for headphones. There's a lot more difference between spending $100 and $200 than $1000 and $2000.


Even more so, when you look at the absolute value increase, the difference between a $100 and a $200 pair of headphones is going to be far greater than the difference between a $1000 and a $1100 pair of headphones.
 
Feb 28, 2009 at 11:16 PM Post #5 of 215
Interesting thread but I think you should have made the range larger.

With the recent introduction of >$1000 phones, that I have read more than a few Head-Fiers say that they can't wait to own (despite never having heard them) this range seems a little narrow.

I voted the max because I've come to believe that even a $600-$700 headphone can be a good value to those who spend enough time listening to them.
After that, your just paying for the "New" imo.
 
Feb 28, 2009 at 11:37 PM Post #6 of 215
Quote:

Originally Posted by Nosoupforyou /img/forum/go_quote.gif
What would you say would be the maximum amount that Joe should spend (on headphones/ phone+amp/ any other extras) before the Law of Diminishing Returns kicks in, and it's simply a better idea to spend his money upgrading his source material or adopting a cat.


I would submit that this is virtually impossible to answer. It depends on too many variables that are unique to each individual, such as how much money do they have in an absolute sense (silly to buy headphones if you need food), how often are they going to listen to their phones, how much do they enjoy music, how important is high fidelity sound to them, how do various aspects of improved sound quality impact them personally (in terms of how much pleasure they bring), what other alternative uses might they have for their money, how relatively important are these other uses (i.e., how much does Joe like cats), etc.

And it is also impossible to say where the diminishing returns really start or what is the best bang for the buck. For some "Joe's," given the information provided, the point at which they are satisfied with a phone and don't want to upgrade in light of the opportunity cost might be $200. For another "Joe" with the exact same background, it might be $1500 or more.

Also, there is no way to measure "returns" in headphone enjoyment. A $200 phone represents a 33% increase in cost over a $150 phone. How does one measure a 33% improvement in sound or enjoyment? What's the measuring standard or yardstick?

I'm not trying to be a stick in the mud; it's just that I think the answer to the question is so dependent on the individual and their particular situation and preferences that it is virtually impossible to provide an answer that is even generally applicable (which in part is why a lot of us are here, and are often upgrading).
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Feb 28, 2009 at 11:38 PM Post #7 of 215
Aye, I thought about making the poll go all the way up to $1000 and beyond... there's a lot of people on Head-fi who would spend that much money...

But then I thought of Joe, and the cat that he could rescue, and I just didn't have the heart.
 
Mar 1, 2009 at 12:14 AM Post #9 of 215
Quote:

Originally Posted by Nosoupforyou /img/forum/go_quote.gif
Aye, I thought about making the poll go all the way up to $1000 and beyond... there's a lot of people on Head-fi who would spend that much money...

But then I thought of Joe, and the cat that he could rescue, and I just didn't have the heart.



Ah, Joe...
 
Mar 1, 2009 at 12:21 AM Post #10 of 215
I think the real question is when one considers the improvement to be negligible, and the surounding equipement (as well as how much one earns). I personally hope to upgrade to true high end in the next year or two (he60 or if money allows and a seller exist a he90) and find the advantages of headphones costing will over $1000 to be well worth it. However, many do not for varying reasons.

Quote:

Originally Posted by cswann1 /img/forum/go_quote.gif
I voted the max because I've come to believe that even a $600-$700 headphone can be a good value to those who spend enough time listening to them.
After that, your just paying for the "New" imo.



Intersting, but how do you explain the cost of the HE60, HE90 or AKG K1000 then. All are out of production and cost well over or around in the case of the k1000 1000 dollars. (Yes, I know i'm bieng picky, but i'm just re-inforcing that there is no one rule that works).
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Mar 1, 2009 at 12:22 AM Post #11 of 215
Not sure if this is something you can quantify, but from the HPs I've heard, I would say anything around $6-700 is the MAX I would spend right now on HPs. I'd rather max out my amp and source first, if I feel like it down the road.
 
Mar 1, 2009 at 12:27 AM Post #12 of 215
I'm a little confused by the poll.

People can easily choose the last option ($550.00) but this does not mean that those people are saying that the law of diminishing returns does not exist.

Are you asking at what price point the law of diminishing returns kicks in regarding headphones?

If so, I definitely think that the figures need to be spread differently, and go well into the thousands of dollars.
 
Mar 1, 2009 at 12:28 AM Post #13 of 215
Quote:

Originally Posted by csommers /img/forum/go_quote.gif
Not sure if this is something you can quantify, but from the HPs I've heard, I would say anything around $6-700 is the MAX I would spend right now on HPs. I'd rather max out my amp and source first, if I feel like it down the road.


I agree, to get the most out of higher end headphones one needs to also upgrade there source and amp. Though, this really should go without saying.
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Quote:

Originally Posted by Rob T /img/forum/go_quote.gif
Are you asking at what price point the law of diminishing returns kicks in regarding headphones?

If so, I definitely think that the figures need to be spread differently, and go well into the thousands of dollars.



Diminishing returns exist once you spend over a dollar, that doesn't mean one will percieve it as bieng so. (Though once again, i'm generalizing). I wonder if the real question is, "when does diminishing returns make it no longer worhtwhile for you to spend any more on a headphone?". In which case the question starts having to do with ones income, as a student i'm at the highest level I personally can go, but when I start working full time again that will change.
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Mar 1, 2009 at 12:39 AM Post #14 of 215
Quote:

Originally Posted by Suntory_Times /img/forum/go_quote.gif

Diminishing returns exist once you spend over a dollar, that doesn't mean one will percieve it as bieng so. (Though once again, i'm generalizing). I wonder if the real question is, "when does diminishing returns make it no longer worhtwhile for you to spend any more on a headphone?". In which case the question starts having to do with ones income, as a student i'm at the highest level I personally can go, but when I start working full time again that will change.
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Well said.
 
Mar 1, 2009 at 12:45 AM Post #15 of 215
Quote:

Originally Posted by lucky /img/forum/go_quote.gif
I don't care what anyone else does, but if I need an expensive amp to enjoy an expensive headphone more than I enjoy a cheaper phone, I'll take the cheaper phone every time.


I'm the opposite, the Amp would be lowest on my list.

Get the best headphones I can that fits my preferences, but also will scale with my gear as it goes on, as I did with AD900.

Spend the most on the SOURCE, SOURCE matters most, that's where the sound starts and from there trickles down.

The Amp last, because Amp is just an amplifier. It should not changing the sound, remain neutral and transparent. The sound of the music should be from the Source and the Headphones. I don't care about an Amp beyond what I got now. It's fun to read about the expensive amps, but to me, it makes absolutely no sense to buy a $2000 amp for a $350 headphones. But that's my opinion.

Future is HD650 or K501, not another amp. If I change my setup, it will be the DAC and an Amp to match, as I will likely go with one with CAST technology, need an Amp to match the DAC.

Whether someone likes to change the EQ of the music with tubes, well that's just a preference.

But I think the diminishing returns is a very good point. At some point, I personally think, there is no point. Save the money for a speaker system instead.
 

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