It varies from item to item.
For most stuff, as above, it can reduce breakage or make the item more difficult repair if it's a really expensive item.
Though some items have penalty moodlets or bonus moodlets if the item is considered "cheap" or high quality that can be applied when used, such as cheap stoves making the food taste bad or cheap showers giving you the cold shower penalty.
The issue is that the game doesn't tell you any of this and you generally have to figure it out via trial and error as some items added later can be awesome but low-priced but not considered cheap or even have better bonuses then more expensive stuff (one of the beds added in..i think IP, is almost on par with some of the best beds in terms of benefits but is a mere 400 or so cash, while other similarly priced beds are complete garbage in terms of ability and have the cheap penalty), while you have stuff like the all-in-one bathrooms which are extremely expensive but coded as cheap causing them to break constantly.
Also some items have expanded functionality with different upgrade options available.
Cheap dish-washers are loud but can be upgraded to be silent, while better quality dishwashers are just silent naturally while older tvs can't be upgraded much, while mid-level tvs can have channel count or picture quality boosted, and higher end tvs already include all those enhancements so you can only make them unbreakable.
Also some Sims have preferences for more economical or more expensive items, or certain wishes requiring items above a certain price to count.
Also more expensive items are useful for upgrading Lots, since you can cram more value into less/same space.