$9 footlong? Subway teaches you how to raise your price.

Walk into a Subway sandwich shop in New England and you'll be hard-pressed to find the $5 footlong sandwich ... the marketing sensation of the past few years, invented by a sole Subway franchisee somewhere down south that took the nation by storm. The jingle from the TV spots may still be in your head but most of those five-dolla-foot-longs have been replaced by paninos with higher prices. At a Subway store in Danbury, Conn., a poster sports a $9 sandwich that includes beef and bacon -- truly a marvelous creation, we have no doubt, but nearly twice the price point featured on the Subway web site.

Which is continued pricing brilliance, we suggest. Behavioral economist Richard Thaler noted in the early 1980s that consumers often need an inflated "reference price" -- such as a dress marked down from $150 to $75 -- to help them feel that they are getting a good deal. Many reference prices don't really exist; that dress is not really 50% off, ladies, because no one ever paid $150; yet the artifice in the sky makes things closer to the ground seem more attractive. Most smart marketers work hard to obscure price information to protect their margins; this is why Omaha Steaks come in strange assorted bundles of food, why movie theater candy comes in weird large boxes, and why Toyota minivans are sold with incredibly complex bundled options. Change the shape, boost the add-ons, and damned if a regular Jane or Joe can figure out if the price is a fair shake.

We suspect that Subway, a victim of its runaway $5 success, has had to back away from the cheap enormous sandwich which left little room for profits. Rather than upset customers who might suspect a bait and switch, Subway has thus created a new complex menu filled with distraction: some premium fare that costs much more, a low-cost breakfast line, and small English muffin sandwiches with prices below 5 bucks. It all adds up to make the $7.50 you'll spend on lunch, well, palatable.