EUROPEAN HOUSEHOLD SURVEY (EHS) PRESENTATION OF A PROPOSAL FOR THE 2010 NCN MODULE: STATISTICAL PORTRAIT OF EUROPEAN CONSUMERS

Transcription

1 EUROPEAN COMMISSION Health and Consumers Directorate-General Directorate B - Consumer Affairs B1 - Consumer Markets ANNEX point 2.3 EUROPEAN HOUSEHOLD SURVEY (EHS) PRESENTATION OF A PROPOSAL FOR THE 2010 NCN MODULE: STATISTICAL PORTRAIT OF EUROPEAN CONSUMERS MEETING OF THE EUROPEAN DIRECTORS OF SOCIAL STATISTICS LUXEMBOURG, SEPTEMBER 2008 BECH BUILDING, ROOM AMPERE

2 I. BACKGROUND The EU Consumer Policy Strategy 1 emphasizes the importance of a better understanding of how consumers behave. A thorough knowledge of the capacities, information and assertiveness of consumers is crucial to being able to design and develop policies that take account of the real behaviour of consumers, as opposed to theoretical models. As the strategy says, consumer policy seeks to protect consumers from risks that they cannot be expected to tackle as individuals and to empower them to act in their own interests in areas where they can and should act themselves. A better understanding of the real capabilities, information and assertiveness of consumers will therefore both help policymakers draw the line between problems that consumer can and cannot be expected to tackle and to help guide policies designed to empower consumers. At present there is relatively little empirical data about the capacities, level of information and assertiveness of consumers. A statistical snapshot of Europe's citizens in their capacity as consumers would provide such data and would begin to provide a better empirical basis for consumer policy development and in particular the integration of consumer interests into other EU policies. Such a portrait could help policy development in the following ways: Much consumer-related regulation is based on the notion of an average or reasonable consumer. Therefore, it would be interesting to gain further insight into the average capacities of the EU consumers and the willingness to use them in different groups (segments) of consumers (e.g. a breakdown by age, education level, country, etc.). There is also considerable concern and debate about disadvantaged or vulnerable consumers. This important debate is currently limited by a lack of data about both the level of empowerment (in terms of capacities, information and assertiveness) of the EU consumers and the extent to which EU population consists of disadvantaged/vulnerable consumers. Indeed while some class certain socio-economic categories of consumers (e.g. poor education, low income, etc.) as, by definition, disadvantaged and susceptible to detriment, others argue that all consumers can be vulnerable in certain ways at certain times (because of the nature of the transaction, the difficulty to ascertain the product qualities, etc.). A statistical snapshot would shed light on this debate by indicating the real capacities of the EU consumers and the presence of disadvantaged consumers or specific vulnerabilities in the population. As well as shedding light on regulatory design and policy overall, such data would also be useful background in the implementation of legislation based on the notion of the average consumer. Many regulatory interventions are based on consumers being able to read and understand regulatory-mandated information. This is the case, for instance, of open and liberalised markets that are expected to provide choices for consumers. A statistical analysis could help policymakers better design such interventions, more conscious of the real capacity of consumers to read and understand regulated information. A portrait of the level of consumer literacy and numeracy could be useful both in designing consumer-specific regulation and other policies that seek to empower consumers through providing information (e.g. financial services, energy, telecommunications, sustainable consumption, nutrition etc.) 1 2

3 The consumer strategy seeks to empower consumers to actively participate in the market. As well as skills, this depends upon consumers knowing their rights and being willing to assert them. A clearer picture of the extent to which consumers know their rights and are willing to assert them will provide a valuable basis for the development of consumer information, education and collective and individual redress initiatives at EU and national level. This data will also form an important part of the efforts in the Consumer Market Scoreboard 2 to benchmark the consumer environment. In particular it will provide important contextual data for the interpretation of reported consumer complaints figures that need to be read in conjunction with other indicators such as the perception of the likelihood of success, trust in enforcement agencies or in consumer organisations, etc. II. THE EUROPEAN HOUSEHOLD SURVEY At present, relatively little EU-wide comparable data exists in the area of consumer empowerment (levels of consumer education, information, understanding, awareness and assertiveness). Existing Eurobarometer surveys have attempted to capture some of these aspects 3, although a full portrait is far from having been developed. The existing Eurobarometer sample size also make it difficult to carry out the detailed socio-economic analysis that would bring insights into the average/vulnerable issues and national differences; besides, given the sample size, it is not easy to gain reliable data for "low incident" issues In this context, SANCO was very pleased to learn of the development by Eurostat of a new statistical system the EHS (an integrated and coordinated programme of social statistical surveys, consisting of a core variables module, regular annual and 5-year module and annual ad hoc modules). Due to the high political importance of consumer issues (the EU Consumer Policy Strategy emphasizes the consumer dimension of the internal market as well as the need to empower consumers), SANCO proposes that an ad hoc EHS module on consumer issues could be run in This would provide empirical basis for consumer policy development and for integrating consumer interests into other EU policies

4 III. POSSIBLE OUTLINE OF SURVEY The ability of consumers to act in an informed and empowered way mainly depends on three groups of attributes: Skills: The capacities or skills of consumers to read, understand and process the information available to them. Information/Awareness: The knowledge consumers have of their rights, of the market and of the institutions/organisations available to help them. Assertiveness: The willingness of consumers to pro-actively seek information and to assert their rights and complain when faced by a problem. The willingness of consumers to complain and assert their rights will not only be a function of their own attitude and knowledge but also their perception of the chances of success and therefore the attitude and trustworthiness of the business and institutions involved. The development of survey questions to measure these attributes will be able to draw on a number of sources. As far as it concerns the awareness and assertiveness attributes, existing Eurobarometer surveys (such as surveys on knowledge of consumer rights prior to and after information campaigns in new Member States, as well as the survey on consumer protection in the internal market) and other Eurostat surveys, for example on ICT usage, will help. On the other hand, SANCO is aware that the measure of consumer skills is much more challenging. There exists adult and child literacy and innumeracy work carried out by the OECD (IALS, ALL, PISA, PIRLS surveys), which may also provide a solid basis for developing questions more focused on consumer skills. But, at this stage, it is not certain that the EHS methodology and the limited budget/time available will permit data collection on actual skills, rather than self-declared skills. Further work is needed to assess the technical feasibility and costbenefit of such questions, in particular in the context of a short interview. General socio-economic variables, such as age, employment, gender, educational attainment, income, will be included in the core variable module. Other indicators of possible factors that have been linked to vulnerability, such as over-indebtedness, can be added in the module. A list of possible points/variables to be dealt with in the module follows: A. How well equipped are consumers with the appropriate skills/capacities? Literacy Declared or actual ability to read typical consumer information (a short paragraph could be used to ask the interviewee to rank it on a difficulty scale and, then, to check his/her actual understanding by means of a few questions (no more than 2) Numeracy/ Financial literacy/ability to make comparisons 4

5 Declared or actual ability to make simple calculations, to understand concepts such as percentages, to compare different offers mathematically (same strategy as literacy) Legibility The (measured or declared) ability to read labels or information (see recent legislation on food labelling that regulated font size for certain data or the recent decision requiring warnings on magnetic toys be conspicuously displayed and appear in a clearly visible and legible manner). In the light of changing demographics, levels of visual impairment of consumers are not known. Internet usage The (declared) ability and access to use the internet to find information. Comprehension: (subject to technical feasibility) Measure consumers' knowledge and recognition of: product warnings and symbols; misleading, deceptive or fraudulent advertisements; etc. B. Are consumers well informed? Empowered consumers have a good idea of the prices they should be paying, of their rights, of institutions put in place to help them. Prices At a time of rising inflation, this would test the accuracy of the reference prices consumers use. Knowledge of average prices for a few standard products (e.g. a loaf of bread, etc.) could be investigated. Rights Empowered consumers are the front line in terms of enforcement of consumer legislation. Knowing rights is the first step to enforcing them. Knowledge of rights to return, repair and replacement, cooling off periods, on unfair contract terms, pre-contractual information and unfair commercial practices could be surveyed. Extent to which consumers usually read regulatory-mandated information before acting (e.g. signing a contract, etc). Percentage of consumers declaring they know their rights when: ordering something via Internet, taking out a credit, returning a product, etc. Institutions Knowing where and how to look for information, complain, seek redress (awareness of Ombudsman, consumer NGO, complaint hotline, ECC, etc.). Percentage of consumers that have, actually, asked institutions for information or help. Information 5

6 Extent to which consumers consult consumer magazines, product tests, price comparison websites or other sources to find the best offer. Membership of consumer organisations. Extent to which consumers read, watch or listen to consumer affairs media. Perception of trustworthiness of different information sources. C. Are Consumers Assertive? Willingness to seek information on consumer rights. Willingness to complain and/or report incidents to a trader or a third party complaint organisation. Levels of actual complaint compared to problems encountered; % of consumers who have made a formal complaint, who have exercised their warranty rights, who have exploited the cooling off period. Percentage of consumers satisfied with the way their complaint was handled Willingness to take a case to alternative dispute resolution or the courts, either as an individual or collective action. Minimum amount of financial detriment to be pushed to complain. Perception of likelihood of positive outcome from complaint to third party, action in ADR body or before courts. Trust in public and private consumer bodies; perception of consumer protection compared to other EU countries. Grounds/causes that prevent consumers from complaining or asserting their rights. Willingness to join consumer associations. IV. CONCLUSION A thorough knowledge of the skills, awareness and assertiveness of EU consumers is crucial to being able to design and develop policies aimed at consumers protection and empowerment. At present there is relatively little empirical data about these issues. Thus, an ad-hoc module in the framework of the EHS could be very useful to fill this gap. A possible outline of the survey (with a draft list of variable to be measured) has been given, focussing on the 3 main consumer attributes (skills, awareness and assertiveness), which are expected to be more significant in the understanding of how consumers behave. The directors of social statistics are invited to comment on this document. 6