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ERIC Identifier: ED351612
Publication Date: 1992-00-00
Author: Bonner, Patricia A.
Source: Adjunct ERIC Clearinghouse on Consumer Education Ypsilanti MI.

Consumer Competency: A National Status Report. ERIC Digest No. 1.

There is general agreement that our nation must give more attention to consumer education. Consumer literacy benefits individuals, society and business (Knapp 1990). This Digest presents currently accepted goals for consumer competency and summarizes research documenting the need for advancing consumer education in the nation's schools and communities. The issues of teacher competency and recommendations for improving consumer education in the nation's schools are also addressed.


Consumer education is a process of gaining knowledge and skills needed in managing personal resources and influencing the social, political, economic, technological, and environmental decisions that affect consumer well being. The "Classification of Concepts in Consumer Education" (Bannister and Monsma 1982) which provides the conceptual framework for the field arranges consumer concepts into a taxonomy of three primary categories--Decision Making, Resource Management and Citizen Participation.

Green's (1985) "gleaning of the literature" has yielded five distinctive goals and objectives for consumer programs:

1. Produce competent buyers and users of goods and services;

2. Produce competent financial managers;

3. Produce an understanding of the economy;

4. Generate an acceptance of consumer responsibilities along with an assertion of consumer rights; and

5. Help people examine their values in order to develop a philosophy enabling them to achieve satisfaction within the resources they possess.


Measuring consumer competency helps determine success in educational programs and where improvement is needed. Surveys of consumer knowledge and skills in the U.S. reveal large gaps. In 1991, a nationwide test of consumer knowledge of high school seniors found that these students are "virtually unprepared for the many critical purchasing decisions they will need to make after they graduate from school" (p.3, Brobeck 1991). The teenagers tested were able to answer only 42 percent of the questions correctly when they could have answered 25 percent correctly just by guessing.

The nation's adults do not fare much better. On average, Americans who took a similar consumer knowledge test gave correct answers to only 54 percent of the 249 questions about banking, insurance, product safety and buying a house, a car and food. It was found most Americans do not know the annual percentage rate (APR) is the best indicator of a loan's cost, or that the real estate agent legally represents the seller, not the buyer (p.3, Brobeck 1990).

In the 1986 National Assessment of Educational Progress which evaluated a nationally representative sample of young adults ranging from high school dropouts to Ph.Ds, it was revealed that only a small percentage could do moderately complex tasks needed to function in the marketplace. For example, only 30 percent were able to compute the cost of a meal from a menu. Even fewer--13 percent--could successfully compute the exact amount of a tip. Less than 5 percent were able to estimate the cost of a product using grocery unit-price labels (Barton & Kirsch 1990).


The lack of consumer competency is attributed to several factors. Consumer education is not uniformly available to all who could benefit from it or who might contribute to its development. A 1990 survey by the National Coalition for Consumer Education found 31 states with a consumer education policy. The policies differ greatly. In six states, the policy covers both elementary and secondary instruction of all students whether enrolled in general or vocational programs. In other states the policy applies only to vocational students. Free enterprise economics is the emphasis for some programs. There are also variations as to whether a course is mandatory or optional, whether the concepts are presented in a separate course or integrated into other courses (Scott 1990).

Another element is the preparation of consumer educators. The field of consumer education has roots in several areas of learning (including business, home economics, social studies, and math). Instructors from one or several of the disciplines may provide consumer concepts. Early studies of school teachers and potential teachers found that regardless of home discipline, the teacher's level of competency is lacking. In a national study of prospective teachers who were seniors in teacher colleges, Garman (1979) found consumer competency scores did not indicate a high level of comprehension. A study in Oregon of actual teachers had similar conclusions (Lofgren and Suzuki 1979).

The limited opportunity for consumer education beyond the classroom is also a contributing factor. A conference report by consumer affairs professionals from business, education, consumer organizations, community groups, and government points to the absence of other than sporadic consumer education opportunities for adults. Opportunities in non traditional settings at the "teachable moment" when a person is confronted with a complex market decision are especially scarce (Avon 1984).


The intricacies of the marketplace and the rapid pace at which society progresses make the role of consumer a larger challenge than it has ever been before. Improving consumer competency in the United States will require awareness and commitment by policymakers and educators.

Recommendations for improving the level of consumer competency in the United States range from marketing to miscellaneous improvements in the nation's education programs. Consumer specialists have identified promotion of research data documenting the need for consumer education as a priority (Avon 1984).

For the nation's schools, Brobeck and Cohart (1988) suggest:

--universal requirements for instruction in consumer education

--requirements that focus specifically on consumer skills and awareness as opposed to economic education and related subjects

--adequate preparation of consumer education instructors in college or graduate school

--continuing support for consumer education teachers

Specific suggestions for supporting teachers in the nation's schools include further instruction, updated textbooks, bias-free supplementary materials, and a newsletter or magazine. All of these would be useful to community consumer educators (i.e., youth leaders, cooperative extension agents, social workers, literacy volunteers, and employee relations personnel) as well.


Avon Products, Inc. (1985). SHOULD THERE BE A NATIONAL AGENDA FOR CONSUMER EDUCATION? Avon Products, Inc., Consumer Information Center, New York, New York.

Bannister, Rosella and Charles Monsma (1982). CLASSIFICATION OF CONCEPTS IN CONSUMER EDUCATION. (MONOGRAPH 137), Cincinnati: South-Western Publishing Company. EJ 291 388

Barton, Paul E. and Irwin S. Kirsch (1990). WORKPLACE COMPETENCIES: THE NEED TO IMPROVE LITERACY AND EMPLOYMENT READINESS. (PUBLICATION NO. IS Research and Improvement, U.S. Department of Education. ED 317 873

Brobeck, Stephen (1991). STUDENT CONSUMER KNOWLEDGE: RESULTS OF A NATIONWIDE TEST. Consumer Federation of America and American Express Company.

Brobeck, Stephen (1990). U.S. CONSUMER KNOWLEDGE: THE RESULTS OF A NATIONWIDE TEST. Consumer Federation of America and TRW Foundation.

Brobeck, Stephen and Judy Cohart (1988). SECONDARY CONSUMER EDUCATION: A STATUS REPORT. Consumer Federation of America.

Garman, E. Thomas. "The Cognitive Consumer Education Knowledge of Prospective Teachers: A National Assessment." JOURNAL OF CONSUMER AFFAIRS, Summer 1979, p. 54. EJ 203 892

Green, D. Hayden (1985). THE ROLE OF CONSUMER EDUCATION IN THE GENERAL EDUCATION OF ALL STUDENTS. Kyoto Conference on Consumer Education, Japan Academy of Consumer Education, Kinjo Gakuin University. Unpublished speech.

Knapp, John P. (1991) THE BENEFITS OF CONSUMER EDUCATION: A SURVEY REPORT. Michigan Consumer Education Center, Eastern Michigan University. ED 329 772

Lofgren, Wendy L. and Warren N. Suzuki. "An Assessment of the Competency of Secondary School Teachers in Consumer Education, Economics, and Personal Finance." JOURNAL OF CONSUMER AFFAIRS, Winter 1979, p. 380.

Scott, Charlotte (1990) 1990 NATIONAL SURVEY: THE STATUS OF CONSUMER EDUCATION IN UNITED STATES SCHOOLS: GRADES K - 12. National Coalition for Consumer Education. ED 329 773


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