A woman walks past a discount sign. Neuroscience has found that low price tags trigger brain impulses akin to game-playing behaviour that strives to win. (iStockphoto)

It was cheap, made-in-China socks that first got Ellen Ruppel Shell thinking: How is such a low price tag even possible?

A search for the answer led the Boston University journalism professor and contributing editor of The Atlantic Monthly to an even bigger question: What are the real costs of such bargain basement goods?

In her new book, Cheap: The High Cost of Discount Culture, Ruppel Shell examines the North American fixation with rock-bottom deals and the deeper underlying costs of the how-low-can-you-go mentality.

What she finds is that the "endless pursuit of cheap" has pushed out a middle ground that once existed of good quality, but reasonably priced, items, leaving only high-end boutiques and discounters.

'We've changed our behaviour to accommodate the limitations of this furniture. And what I say is: Is it really furniture, or is it kind of the idea of furniture?'—Ellen Ruppel Shell

"If we reconsider this, we can demand and get that middle-ground product and have a lot more options than we actually have now," Ruppel Shell told CBC's The Current. "We have many fewer options than consumers realize. The offerings have become very homogenized."

One example of the troubling effects of discounted goods that Ruppel Shell details in her book is the morphing of shrimp from high-priced luxury food into grub as cheap and common as canned tuna.

"The very low-price shrimp that we have coming to us in the United States comes with a large consequence in terms of environmental degradation and human rights violations in the developing world," Ruppel Shell said.

Industrialization of the shrimp industry saw farmers reconfiguring mangrove swamps in Thailand, where many shrimp come from, to accommodate shrimp ponds. Taking the crustaceans out of the wild required large amounts of antibiotics and artificial food, Ruppel Shell says.

And in the end, farming crustaceans proved difficult, with ponds became so polluted they no longer sustained the shrimp. Shrimp farmers, as a result, saw their once rising riches fall, for some as deep as bankruptcy.

Style over craftsmanship

Ruppel Shell takes specific aim at several well-known purveyors of cheap, including IKEA, the world's largest furniture retailer, known for its Swedish-stylized merchandise.

Author Ellen Ruppel Shell: 'Oftentimes, when we come home with those great deals that we thought were great deals, we're disappointed. We don't know sometimes why we bought what we bought.' (Penguin Press)

The Dutch-owned company designs to price, meaning it first determines the price tag of an item, such as 50 cents for a coffee mug. Designers come up with an idea and then the company outsources to a manufacturer based on the price requirements.

"And so that means while the design might be quite nice, the craftsmanship in that product is often not very nice."

As an example, Ruppel Shell points to the ubiquitous IKEA bookshelves. Blog and forum postings are rife with customers strategizing to keep the thin shelves from bending, such putting heavy tomes on the edge and paperbacks in the middle.

"We've changed our behaviour to accommodate the limitations of this furniture. And what I say is: Is it really furniture, or is it kind of the idea of furniture? Is it a good bookcase or is it a good cheap bookcase? And I would argue it's a good cheap bookcase. And that's almost an oxymoron."

And though the retailer, the third-largest consumer of wood globally, has a forestry monitoring team, Ruppel Shell questions their larger environmental impact. Most of their timber comes from Eastern Europe and the Russian Far East, where half of all logging is illegal, according to the World Bank.

IKEA's lead monitor admitted to Ruppel Shell that there's no way to patrol the vast regions to ensure with certainty that the wood is legally harvested.

Bargain-hunting akin to a game

Neuroscientists have found that low price tags trigger an impulsive side of the brain, one akin to game-playing behaviour that strives to win.

"So oftentimes, when we come home with those great deals that we thought were great deals, we're disappointed. We don't know sometimes why we bought what we bought."

The practice of bargaining dates back to ancient bazaars, a time differentiated from the present largely because back then buyers had a relationship with the seller. "And if he breached your trust, he would be going out of business fairly quickly."

"Today, we live in a very different place. We have multinationals selling us goods. We have no idea who made them, sometimes even where they were made, sometimes even what they're made of."

The idea of the sale came into being in North America in large part due to two department store magnates at the turn of last century.

John Wanamaker, who opened one of the first department stores in the U.S., conceived of the first so-called white sale in the post-Christmas slump in an effort to keep his workers employed during the financially trying time of the year.

Costs hit low-income families

The other magnate, Frank Woolworth, was far less worried about his workers and his goods.

The owner of the Woolworth's discount retail chain became notorious for hiring young women paid about $2 or $3 a week, a wage so low they were forced to live with their parents. "He said, 'I need cheap workers to sell cheap goods,' " Ruppel Shell explains.

"Woolworth's was interesting in that he persuaded Americans that they should buy the cheapest thing possible — at the same time amassing great fortune for himself."

Though economists claim cheap goods benefit those in low-income brackets, Ruppel Shell points out that one-third of the working poor are employed in retail, and many of them work for the deep discounters.

So what's the solution?

Ruppel Shell suggests new regulations requiring stores to label products with the country of origin and detailing how the product was made.

As for consumers, she asks them to rethink their priorities and remember the Russian adage: "I'm too poor to be cheap."

"And what that means is, of course, is that focusing so heavily on discounts makes it easy to cheat you."