The Value of Consumer Education in Increasing Effective Consumer Performance: Theory and Research

ABSTRACT - This article examines the degree to which it is currently possible to measure the impact of consumer education on consumer effectiveness. Consumer education is viewed as preparation for decisionmaking. It is not feasible to directly measure consumer education's value in improving decisionmaking. However, there are identifiable factors which can be assumed to be related to consumer effectiveness, and which can be impacted by consumer education.


L. Gayle Royer (1980) ,"The Value of Consumer Education in Increasing Effective Consumer Performance: Theory and Research", in NA - Advances in Consumer Research Volume 07, eds. Jerry C. Olson, Ann Abor, MI : Association for Consumer Research, Pages: 203-206.

Advances in Consumer Research Volume 7, 1980     Pages 203-206


L. Gayle Royer, InterAmerica Research Associates, Inc.

[Dr. Royer is Senior Associate for Consumer Studies, and serves as Director of the Consumer Education Resource Network (CERN). Funding for CERN and for portions of the noted research is provided by the Office of Consumers' Education/USOE.]


This article examines the degree to which it is currently possible to measure the impact of consumer education on consumer effectiveness. Consumer education is viewed as preparation for decisionmaking. It is not feasible to directly measure consumer education's value in improving decisionmaking. However, there are identifiable factors which can be assumed to be related to consumer effectiveness, and which can be impacted by consumer education.


The complexity of decisions facing consumers today reinforces the need for a cadre of trained, alert, and responsive citizens, each prepared to analyze current issues, identify and interpret relevant information, and make reasoned judgements in line with his/her own goals and the goals of society. The present level of preparedness of American adults is far from adequate to meet these needs, however. In a recent study of adult functional competency (Kelso 1975), the greatest deficiency was in the area of consumer economics. Fewer than 30 percent of the adults with eighth grade education or less, and fewer than 38 percent of adults with secondary education could cope with the basic subject matter. The remaining 60 to 70 percent were functionally inadequate in all aspects of the subject. In reporting on this study, Kelso states that

translated into population figures, some 34.7 million adult Americans function with difficulty and an additional 39 million are functional (but not proficient) in coping with basic requirements that are related to Consumer Economics (p.6).


The content areas evaluated in the adult functional competency study were combinations of concepts normally covered in secondary courses in economics, consumer education, and consumer economics; as well as the traditional curricula such as home economics, business, social studies, and mathematics (Uhl et al. 1970).

This confusion in definition of consumer education content is not a new problem faced by curricula developers. In an analysis of course content as it existed in 1934, Koos (1934) found that similar confusion and overlap existed at that time, and suggested greater specification of content division and areas of interdisciplinary coverage. His suggestions have gone unheeded for over 40 years, while the muddled state of the content has become a tradition.

The situation is complicated further by state legislatures as they mandate or encourage inclusion of consumer education in public school curricula. Alexander (1979) found that 38 states have legislative mandates or resolutions urging the teaching of consumer education. There is little consistency or common language among mandated programs.

Outside the traditional school system, consumer education is a viable component of adult education programs, special interest/advocacy efforts and the business community. Granted, these groups do not address consumer education consistently, but each in its own way makes conscious efforts to bring about a change in consumer behavior. Business involvement in consumer education is becoming an internalized corporate function. The private sector still, as in the past, funds teacher training programs and research efforts, and produces abundant print materials. However, while such efforts are perhaps conducted with the usual degree of "enlightened self-interest," there is a noticeable change in the impetus for these efforts: the staff position with designated responsibility for consumer education. As the number of such positions increases, so does the influence of business in legitimate consumer education.

It would be wondrous indeed if, with the pressures of classroom educators from many subjects of community-based organizations, of special interest groups, and of business, there had evolved one uniformly accepted definition of consumer education. Such a wonder has not come to pass, nor is it likely to occur in the near future.

The Model

In a move toward alleviating some of the problems resulting from the lack of clarity in definition, research was designed to delineate the parameters of consumer education and to develop a model which can be used to assess the focus and content of the field. The research and writing for this effort (Trujillo 1977) was conducted by the staff of InterAmerica Research Associates, Inc., under contract with the U.S. Office of Education, Office of Consumers' Education. The resulting interpretations, conclusions, and recommendations are those of InterAmerica and do not necessarily reflect the views of the Office of Consumers' Education.

In the course of the research a draft model was developed, comprised of concepts commonly found in economic education, consumer education, finance, personal economics, or consumer economics. Using a modified Delphi technique, the draft was submitted for review and comment to a panel representing the perspectives and viewpoints of all groups with an interest in such a study. The panel consisted of nationally recognized representatives of:

* the economic interests of labor,

* the economic interests of business,

* economic educators,

* consumer economists,

* consumer activists,

* family life educators, and

* education administrators.

A preliminary scope and sequence model was developed listing those content areas (concepts) appropriate for consumer education and/or economic education at the levels of kindergarten through grade 12. The working definition used in the development of the preliminary model was taken from the U.S. Office of Education, which considered consumer education to be

an effort to prepare persons for participation in the marketplace by imparting the understandings, attitudes, and skills which will enable them to make rational and intelligent consumer decisions in light of their personal values, their recognition of marketplace alternatives, and social, economic, and ecological considerations (U.S. Office of Education 1976).

The Procedure

Panel members received the draft model and reviewed it three times in an effort to produce a final model which reflected consensus as to the content to be included in consumer education. [The research permitted a panel member to place a concept in consumer education, in economic education, in both, or in neither. Only the consumer education portion of the research is included in this paper.]

During each review, a panel member could suggest additions, deletions, or changes in format, emphasis or orientation. In addition to these general reactions, the panel completed specific tasks aimed at achieving consensus. In the first review, each panel member responded to each concept by indicating whether that concept was appropriate to consumer education at the K-12 level.

A depth-of-coverage scale [The depth-of-coverage scale permitted reviewers to indicate whether each concept should be mentioned only, should receive minor coverage to show relationships to other concepts, or should receive major coverage. By selecting none of the three alternatives, the reviewer indicated that the concept should not be included.] was added for the second review. If the panel omitted a concept in the first review and, during the second review, a panel member indicated that the concept should receive some coverage, that panel member was required to explain his/her reasoning. A third review was designed to permit feedback and interaction among the panel and to refine the depth-of-coverage assessments. The third model reflected all suggested changes and the scale indicated the degree to which the panel had achieved agreement after two reviews. All minority opinions from the second review were reported, to allow panel members to consider different viewpoints. Panel members were required to give explanations in this final instance if their opinion of depth-of-coverage differed from the second review majority opinion for each concept.

Few concepts were eliminated from the model during the reviews. Inasmuch as the panel was identifying concepts appropriate at the K-12 level, some concepts were considered inappropriate for that level and were excluded from the model. With practical curricular limitations in mind, a task was developed for the final review, whereby each reviewer voted the 15 concepts most necessary in consumer education.

Implementing the Model

The concepts under study were grouped into categories by general topic, to permit ease of reference. The broad categories were arranged to reflect the learning sequence necessary to implement the model. Because of the interrelationship of consumer education and its base disciplines, it is impossible to exclude these disciplines from a description of the learning sequence.

The study of both consumer and economic education begins with identification of resources which limit the ability of producers and consumers to manage affairs to achieve their goals. The extent of ownership of the resources determines the level of income available to producers and consumers. It is appropriate to examine the types of income that are generated through resource ownership.

The existence of limited resources and hence of limited income available from their sale or use, constrains the ability of consumers, producers, or workers to achieve their goals. Consumer, producer, and labor decisions are covered as objective-maximizing approaches to the use of scarce resources. Detailed study of the consumer decision process is appropriate in consumer education, while production and labor are relegated to related fields. It is obvious, however, that some understanding of the relationships among the three approaches is necessary. A detailed examination of consumer resource management can and should follow the study of the consumer decision process, but is not crucial to an understanding of the remaining concepts in the model.

Following the study of the decisionmaking of consumers, producers, and workers, consumer education and economic interface with a study of markets. Markets are examined as institutions in which prices are determined, permitting exchange to occur between consumers and producers seeking to obtain the most satisfaction from resources. The model recommends examination of markets from local, national, and international perspective.

For various reasons, all levels of government intervene directly in the operations of these markets: interventions are examined in the model. Indirectly, the federal government intervenes in markets by actions in pursuit of stable prices and employment for the entire economy. Such stabilization policies are manifest in the model through the inclusion of concepts of monetary and fiscal policy. Once specific policies are implemented, they influence the abilities of individual consumers and producers to achieve their personal objectives. Accordingly, such individuals change their behavior in the markets in which they participate; as a result, the stabilization policies are revealed as having had an impact. The model recommends exploration of similar concepts in alternative economic systems and for other time periods.

The ultimate objective of consumer education is to produce a citizenry capable of analyzing contemporary social issues and developing individual and social policies to deal with them. The model ends with a section on contemporary social issues, the treatment of which requires an understanding of the previous concepts.


The consumer education model is designed to produce citizens who are capable of analyzing issues and selecting among alternative solutions. The Public Interest Economics Center, in independent research (Ferguson 1977), concluded a similar purpose for consumer education and stated that

In general, the prime focus of consumer education should be to facilitate the involvement of citizens in determining the conditions of economic choice confronting them (p. xi).

Consumer educators from all spheres might agree with the general purposes revealed by these two studies, yet question the practicality of achievement. Can the present cadre of consumer educators (from the classroom, the community, and the business arena) deliver programs which promote analytical and decisionmaking expertise, i.e., can we increase the effectiveness of consumers? InterAmerica, having developed a model of consumer education consistent with the lofty purposes, attempted to assess the model by comparison with consumer education as it exists or as it could be modified utilizing present resources.

The Purdue Consumer Education Study (Uhl et al. 1970) is the most recent account of a national survey of consumer education programs. That survey reveals serious deficiencies in the topical coverage of the field, an overlap-and-gap approach which omits many of the teachings essential to the development of analytical and decisionmaking abilities. An updated survey would have been enlightening, but was not permitted by the government. Instead, InterAmerica was commissioned to review the resources available to classroom teachers.

Classroom teachers rely on several inputs for guidance in developing an educational program. Probably the most frequently used inputs are curriculum guides and published texts. Consumer education is taught by persons who have received relatively little training in the subject matter. Under such conditions, dependence on guides and texts is likely to increase, with dominant influence exerted by the texts. It is extremely difficult for a teacher to present concepts which are unfamiliar or, at most, vaguely known to them, and which are absent from the texts which students will be using.

The panel's view of consumer education differs markedly from that of writers of textbooks, workbooks, reference books, and other resources. The resources present consumer education very clearly as a practical individual application of the theory with an emphasis on the marketplace. The model, in contrast, perceives a strong theoretical base, to which consumer education adds individual consumer applications. If teachers continue to rely on these sources for guidance in K-12 program planning, and if guides and texts continue to view consumer education in the narrow context of "how-to," students will never receive the training envisioned by the panel.

Coverage of contemporary social issues was lacking in materials designed for consumer education. Without texts to cover these concepts, without supplementary pamphlets, booklets, or other resources to fill the void, and without curriculum guides to stimulate an analysis of contemporary issues, it is unlikely that teachers will include this category of concepts in their courses.

The working definition of consumer education specifies an understanding of social, economic, and ecological consideration. Based on coverage of contemporary social issues in the resources examined, there is little possibility that students will achieve the prescribed understandings. Ecological and citizenship aspects of consumer interests are seldom covered, and other social issues appear only infrequently.


Inasmuch as our research indicated that consumer education was unlikely to comply with the objectives proposed in Trujillo (1977) and Ferguson (1977), it is appropriate to examine the other accomplishments of the field. Competency-based education is a current emphasis at all levels of government, and tests are available which purport to measure consumer competency. To the extent that the tests are valid, results indicate that test scores are improved as a result of consumer education. Notable among the tests are Stanley's (1975) test of consumer competencies, normed with almost 8,000 Illinois students in grades 8-12 and based on the objectives from the Illinois Guidelines for Consumer Education (State of Illinois 1972). Despite the title of the test (Test of Consumer Competencies), Stanley claims the more manageable task of attempting to measure consumer knowledge. The test has been used by Garman (1977) to measure the consumer education literacy of prospective teachers. German's findings indicate that enrollment in college-level consumer education courses was positively related to test scores.

Stanley's test is certainly not the only test in the field. It is, however, one of the least criticized tests of consumer knowledge. The National Assessment of Educational Progress (1979) pilot study of the consumer skills and attitudes of 17-year-olds has come under fire from a number of sources. The assessment instrument, like others less widely publicized may best be characterized by the lack of consistency in the content of the questions. Richardson (1979) maintains that inconsistent questions reflect the state of the art in consumer education. Assessment instruments purporting to measure competency, skills and attitudes, or just knowledge are accused of what Richardson characterizes as the "I" errors: Invalid opinion, Inane exercises, Incorrect questions, Imperfect wording, and Improper advice.

Despite those well-deserved criticisms, the available tests serve as a tentative measure of consumer information acquisition, if administered and interpreted with caution. Judicious administration of such tests will yield results to indicate that current consumer education programs are increasing consumer knowledge levels in selected areas. Those results will not, however, measure the value of consumer education in increasing effective consumer performance. At least, these tests indicate increases in knowledge. There is not, at this time, convincing evidence that increased knowledge leads to increased proficiency. Jacoby (Jacoby et al. 1977) and Uhl (Uhl et al. 1970) have theorized that relevant consumer education is necessary for the effective interpretation and utilization of information. If so, tests must be constructed to indicate the accuracy of the theory. Further, tests must reveal the specific aspects of consumer education which aid in information processing.

If one accepts the premise that consumer education has, as an ultimate objective, the development of a citizenry capable of analyzing social issues and developing individual and social policies, then one must carefully consider how one would measure "effective consumer performance." One can no longer be satisfied with increased knowledge or with professed satisfaction with a consumption decision. Nor can one risk applying one's own value system to another consumer's performance.

The time has come to develop methodologies for assessing consumer performance and the impact of consumer education. This research area is ripe for exploration. The task will not be simple, we may never achieve a perfect assessment, but it is imperative that we address our research skills to questions such as:

* What are the quantifiable characteristics of effective consumer performance?

* What factors impact on consumer performance?

* How can consumer education increase the incidence of positive characteristics?

Confidence in consumer education may remain largely a matter of faith, as are convictions that a study of history, reading, or English will improve the lifestyles of individuals and thus the nature of our society. Theories of effectiveness may remain unconfirmed. If so, consumer education will doubtless continue in the classroom, the clubroom, and through the media. Our research capability should permit much greater understanding than is currently possible, however. Future research on this topic should not only lead to measurement instruments, but concurrently to our knowledge of the relative effectiveness of various consumer education methodologies.


Ferguson, Allen R., Marc I. Breslow, and Steve Buchanan (1977), Potential Economic Benefits of Consumer Education, Washington, D.C.: The Public Interest Economics Center.

Garman, E. Thomas (1977), A National Assessment of the Consumer Education Literacy of Prospective Teachers from All Academic Disciplines, Blacksburg: Virginia Polytechnic Institute and State University.

Jacoby, Jacob, Robert W. Chesnut, and William Silverman (1977), "Consumer Use and Comprehension of Nutrition Information," Journal of Consumer Research, 4, 119-128.

Joint Council on Economic Education (1975), Survey on Mandated Courses in Economics, New York: Joint Council on Economic Education.

Kelso, Charles R. (1975), Adult Functional Competency: A Summary, Austin: University of Texas.

Koos, Leonard V. (1934), "Consumers Education in the Secondary Schools," School Review, 42, 737-750.

National Assessment of Educational Progress (1979), Teenage Consumers: A Profile, Denver: Education Commission of the States.

Richardson, Lee (1979), "Assessing the National Assessment of Consumer Skills and Attitudes," ConCERNs, 1, 3-4.

Stanley, T. O., (1975) The Development of the Test of Consumer Competencies, Doctoral dissertation, Northern Illinois University, Ann Arbor: University Microfilms.

State of Illinois (1973), Guidelines for Consumer Education, Springfield: Office of the Superintendent of Public Instruction.

Trujillo, Gayle Royer for InterAmerica Research Associates, Inc. (1977), Consumer and Economic Education (K-12): A Comparative Analysis, Washington, D.C.: Office of Consumers' Education/USOE.

Uhl, Joseph N., et al. (1970), Survey and Evaluation of Consumer Education Programs in the United States, Vol. 1: Survey and Evaluation of Institutional and Secondary School Consumer Education Programs, Washington, D.C.: U.S. Department of Health, Education, and Welfare.

U.S. Office of Education (1976), unpublished.



L. Gayle Royer, InterAmerica Research Associates, Inc.


NA - Advances in Consumer Research Volume 07 | 1980

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