Social Science Inputs to Public Policy Formation: Massachusetts and the Unit Pricing Regulations

Citation:

Saul Barry Wax (1975) ,"Social Science Inputs to Public Policy Formation: Massachusetts and the Unit Pricing Regulations", in NA - Advances in Consumer Research Volume 02, eds. Mary Jane Schlinger, Ann Abor, MI : Association for Consumer Research, Pages: 915-924.

Advances in Consumer Research Volume 2, 1975      Pages 915-924

SOCIAL SCIENCE INPUTS TO PUBLIC POLICY FORMATION: MASSACHUSETTS AND THE UNIT PRICING REGULATIONS

Saul Barry Wax, Massachusetts Consumer Council

[The author is the Senior Policy Analyst at the Massachusetts Consumers' Council, a State advocacy agency located in Boston, Massachusetts.]

The Consumers' Council regulates unit pricing on a state-wide basis. The Council constantly explores ways in which unit pricing information may be made both more accessible and more meaningful to consumers. In June, 1974, the Council held public hearings, and based upon the testimony presented at the hearing promulgated amended unit pricing regulations. A fundamental alteration in the regulations was an increase in the size of the specified units of measure/ or regulated commodities. The change was based upon testimony describing the applicability and accuracy of the Weber-Fechtner law to consumer utilization of unit pricing. The research conducted and data presented to the Council by a social psychologist represent the clear use of social science data in a public policy making arena.

The Consumers' Council is an independent consumer advocacy agency founded by the General Court (legislature) in 1963. (See Appendix A.) The Council consists of thirteen members, eight of whom are appointed by the governor (public members) for terms coterminus with his/hers. The remaining five members are ex-officio: The Attorney General, Department of Banks and Banking, Department of Public Utilities, Department of Labor and Industries and the Department of Insurance. All members of the Council have one vote and a Chairman is appointed by the Governor.

The Council acts as an ombudsman within the governmental structure: Its primary functions are consumer advocacy before both the General Court and regulatory agencies, consumer education, and the drafting and filing of proconsumer legislation. The Council is a close approximation of what the Agency for Consumer Advocacy is proposed to be at the federal level.

Although the Council is fundamentally an advocacy agency, in 1970 the General Court, in an attempt to resolve a prickly issue, delegated regulatory authority over unit pricing to the Consumers' Council. (See Appendix B.) Pursuant to the provisions of the statute, the Council held public hearings and adopted a set of regulations. Several years and several sets of regulations later, the Council amended the regulations yet again by specifying acceptable units of measure for commodities which have to be unit priced.

The Problem: Impact and Utility of a Public Policy

The Council promulgated unit pricing regulations with the presumption that such information would enable consumers to save money on their grocery bills. No doubt, the unit price of items does provide valuable comparative cost information. However, the availability of useful data does not insure usage. The proverb about leading a horse to water is surely an accurate one.

The supermarket is a veritable carnival row of sights, sounds and colors, and, consequently, shopping challenges the consumer to separate the hype from those things which help. The Massachusetts unit pricing label was designed to maximize clarity and readability; the size of the type, and the placement of the information and the color of the label were selected with a mind toward distinguishing the unit price labels from the deluge of self-serving information found in the supermarket. Studies had been conducted in a number of areas where several chains had voluntarily implemented unit pricing (Friedman, 1971, 1972; Consumer Research Institute, 1971). A distillation of the findings revealed several bits of information. First, usage of unit pricing hovered at around twenty percent. For the most part, those who used unit pricing were disproportionately white, better educated and middle class. [See especially M. Friedman, 1971.] In many instances, unit price labels were difficult to read, confusing, illegible or simply wrong. And these latter factors took their toll of potential users. To be sure, within a supermarket, there is nothing more discouraging than to try and make use of a poorly displayed label.

The Consumers' Council had by June, 1974, progressed as far as it could in the domains of label design, color specification, type size, authority over means of display, and the positioning of information. If unit pricing information was to be improved, the change would have to be made in an area which heretofore the Council had not taken into consideration

Unit Pricing and The Weber-Fechtner Law

The Weber-Fechtner Law holds that as the numerical difference between figures increases so does the psychological impact of that difference. The difference between 8 cents per ounce and 10 cents per ounce is not appreciable, but the difference between $1.28 and $1.60 per pound is quite noticeable. In writing the next amended version of the unit pricing regulation, the Council turned to research which investigated the impact of the Weber-Fechtner Law.

In May, 1974, a wire story article appeared in the pages of the Boston Globe. The gist of the story, as edited by the Globe personnel, was that unit pricing was simply not working. This bit of information was contrary to the Council's data and hence prompted an investigation into the research cited in the article. A quick check revealed that the story had been filed by a reporter working for the Philadelphia Inquirer and was based upon a study conducted by Professors Lloyd Sloan and David Walton (1974) for presentation at the Eastern Psychological Association Convention. Their study and concomitant finding were refreshingly straightforward. An increase in "the unit size used in presenting unit price information significantly affected consumer buying behavior [p. 3]." Upon receipt of the Sloan-Walton study, the authors were contacted and invited to make a presentation at the Council's upcoming public hearing.

The invitation was accepted by Professor Walton and on June 6, 1974, he came to Boston and outlined in appreciable detail their research findings and the apparent implication for public policy formation. Based upon the Sloan-Walton data (which, it should be noted, is consistent with common sense impressions), the Council altered all units of measure for purposes of maximizing the unit price differentials between products. (See Appendix C.)

The Council's action reflects at the very least the responsiveness and willingness of an agency engaged in public policy making to utilize social (behavioral) science data. Social scientists involved in research topics/ programs which conceivably could have a bearing upon public policies could profitably note the sequency of events which transpired in Massachusetts.

Postscript and Projections

Although altering the units of measure for unit pricing may appear to be a minute consideration, the new policy had a significant impact upon a major industry and has reverberated across four states. The changes which were promulgated meant that the provisions of the Massachusetts regulations were inconsistent with the regulations of other states. Consequently, stores which conduct business in several jurisdictions have been and are with the Council's aid petitioning the regulatory authorities in other areas to amend their regulations taking into consideration the recent changes made in Massachusetts.

At the bottom line of this and all other public policies is (or should be) the question of impact and utilization. An assessment of the amended regulations cannot yet be made. The new units of measure necessitated significant changes in stores' computer systems, and most chains are still getting the bugs out.

The continual increases in the price of food make it very likely that consumers will utilize unit pricing more now than ever before. The changes made by the Council underscore the likelihood that such utilization will be easier and more meaningful for consumers.

REFERENCES

Consumer Research Institute, Cost of unit pricing in grocery stores. Prepared by the A. T. Kearney and Company, Inc., July, 1971.

Friedman, M.P. Consumer price comparisons of retail products: The role of packaging and pricing practices and the implications for consumer legislation. Journal of Applied Psychology, 1972, 56, 439-446.

Friedman, M.P. Dual price labels: Usage patterns and potential benefits for shoppers in innercity and suburban supermarkets. Ypsilanti, Mich.: Eastern Michigan University Center for the Study of Contemporary Issues, 1971.

Walton, D. & Sloan, L. Increasing the effectiveness of unit pricing: Increasing the unit of unit price. Paper presented at the meeting of the Eastern Psychological Association Convention, Philadelphia, Pa., April, 1974.

APPENDIX A

APPENDIX B

APPENDIX C

PACKAGED COMMODITIES REGULATED AND UNIT OF MEASURE

PART ONE

PART TWO

----------------------------------------