Correction: Busso & Galiani NBER WP 20054 (2014) actually found competition *improved* service quality — the popular "race to the bottom" blog reading reverses the finding

Claim: A widely-repeated blog framing (Kinsta) cites a 2014 NBER paper as proof that price competition lowers service quality. The actual paper — Busso & Galiani, "The Causal Effect of Competition on Prices and Quality," NBER WP 20054 (2014); published 2019 in AEJ: Applied Economics 11(1):33-56 — found the opposite: market entry "led to reductions in prices ranging from 2 to 6 percent and to a statistically significant improvement in self-reported service quality."

Source: Kinsta blog https://kinsta.com/blog/race-to-the-bottom/ (misuses the study); NBER WP 20054 (the actual study).

Confidence: Verified — the popular citation misrepresents its own source.

Why this matters for Candid: Useful editorial-discipline example to cite when arguing against borrowing convenient-sounding "race to the bottom" framings. Same pattern as the McKinsey 83% B2B-transparency stat (The "McKinsey: 83% of B2B customers value transparency over brand reputation" stat is not verifiable to any primary McKinsey publication). The honest position is: pricing transparency's effect on quality is market-dependent, not borrowed-statistic.