RESEARCH Business Economy

CONSUMER ILLITERACY
Shoppers who can't read make unwise buying decisions

Mark Reutter, Business Editor
(217) 333-0568; mreutter@uiuc.edu

4/1/2001

CHAMPAIGN, Ill. -- They are one of the largest groups of American consumers, yet research on them is "almost non-existent," says a University of Illinois business professor. They are adults who can't read or do math.

They may have gone to school, yet they are unable to understand everyday signs or labels and cannot add or subtract. Tests indicate that as many as one in five U.S. adults are, to varying degrees, functionally illiterate and innumerate (unable to do math). How do these adults function as consumers? What do they look for when confronted with prices, products and sizes at a store, and how do they interact with cashiers and check-out clerks?

To find some answers, Madhu Viswanathan, a UI professor of business administration, and James Harris, a UI graduate student, spent time at an adult education center. Eventually they selected 19 students for intensive interviews and for trips to the grocery store and shopping mall.

The subjects were between 17 and 62 years old, and had incoming reading and math scores ranging from less-than-first grade to seventh grade. A striking fact about illiterate consumers, Viswanathan reported, was that they based their buying decisions almost exclusively on lowest price. The volume, unit price or ingredients of a product were ignored. As one shopper said as she went down the cereal aisle, "I look to see which costs the most and which costs the less, and so I just get the smaller one because they cost the less."

They also relied heavily on visual cues, gravitating toward products they had seen on television or that "looked good" on the shelf. They typically handed all the money they had to the cashier, and let the cashier count it out.

Avoiding humiliation at the hands of store employees was a major preoccupation, and many only went to stores where the employees were "friendly" and "did not rush you."

Even those with seventh-grade reading levels found it nearly impossible to figure out percentages. When asked, "What is half price? If it is $10, how much would it be," Dave answered, "Maybe $9."

Most, however, did know the difference between denominations of money and often had a bill handy when eating at a restaurant. "They know that for $5 they can get a meal at McDonald's. So they always have a $5 bill, and theyÕll just expect McDonald's to give them back the right change," Viswanathan was told by a teacher at the adult education center

Many of the subjects, when asked to write down the price of an item, read the number wrong ($220 as $22) or reversed the digits (writing $49 as $94). To cope with their difficulty in number and word recognition, many mimicked the behavior of other shoppers or delegated buying decisions to their spouse or children.

A working paper completed by the UI researchers is titled, "Effects of Illiteracy and Innumeracy on Consumer Behavior: The Dark Side of Consumer Decision-Making."