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International Journal of Consumer Studies ISSN 1470-6423

Consumer vulnerability: are older people more vulnerable as


consumers than others?
Lisbet Berg
National Institute for Consumer Research SIFO, Nydalen, Oslo

Keywords
Consumer choices and practices,
environmental vulnerability, vulnerability,
vulnerable consumers, vulnerability drivers,
older consumers.
Correspondence
Lisbet Berg, National Institute for Consumer
Research, P.O. Box 4682 Nydalen, N-0405
Oslo. E-mail: lisbet.berg@sifo.no
doi: 10.1111/ijcs.12182

Abstract
The aging population is an important consumer policy concern. And one relevant
question to ask is: are there reasons to worry about consumer vulnerability among older
people? The aim of the project was twofold: First, to gain insight into what makes people
vulnerable as consumers, more precisely to reveal significant vulnerability drivers.
Second, if possible, to distinguish particularly vulnerable consumer groups and their
needs for targeted consumer policy measures. The project builds on a qualitative pilot
study among older people, followed by a large nationally representative survey among
people living in Norway, between 18 and 95 years old. Based on the analysis of 2100
telephone interviews, this paper rejects our a priori assumption, that older people
constitutes a vulnerable consumer group. Although older people have several reduced
capabilities that could act as vulnerability drivers, older people appeared to be less likely
than other age groups to make unfortunate decisions in the markets. Older people also
show a much more environmentally friendly consumption pattern than younger
generations. The main individual vulnerability drivers appeared to be; poor economic
awareness and lack of time. The results also indicate that people who lack calculating
skills, as well as people living in households with scarce financial resources, are more
likely than others to make economically unfortunate consumer choices.

Introduction
In the years to come large demographic changes are expected
in Europe. During the next 50 years, driven by changes in birth
rates and longer life expectancies, the ratio between working
and nonworking citizens is expected to decrease from 4:1 to
2:1. According to the prognoses, the aging of Europe will be at
the strongest between 2015 and 2035 (Special Eurobarometer,
2012). One way to reduce societies increased expenditures
caused by an ageing population is to make it easier for older
people to manage their lives at home as long as possible. The
starting point of this article was that a prerequisite for achieving this goal is that older people are capable in their role as
consumers.
Vulnerability related to ageing has been approached in various ways. Papers have given attention to vulnerability related
to older peoples general living conditions, as well as to how
age related trigger events like retirement and disabilities affect
the welfare of older people (for a review see Zaidi, 2014). This
article, however, addresses a specific kind of vulnerability, that
is, vulnerability related to the consumer role.
This vulnerability is understood and operationalized as an
increased probability of making unfortunate consumer choices.
However, it is not obvious what kind of choices that should be
categorized as unfortunate. The actors in the markets have dif284

ferent interests (e.g. Stiglitz, 2002). What is undoubtedly an


unfortunate purchase seen from the individual consumers perspective can be quite profitable seen from the perspective of
the supplier of the product. Bought three, paid for two when
only needed one illustrates a consumer choice that is unfortunate for the consumer, beneficial for the supplier, and most
likely contributes to more buy and throw, hence it is detrimental for the environment. In this article, individual consumer
vulnerability is understood and operationalized as the increased
probability of making unfortunate consumer choices seen from
the individual consumers (economic) interest. The analysis
also considers the increased probability of environmentally
unfavourable consumer practices, termed environmental vulnerability. Consumer situations from three segments of the markets
are included, for food, electronics and banking.
The aim of the project was to distinguish vulnerability drivers that can be counterbalanced by consumer policy measures.
Consumer vulnerability was approached as a phenomenon that
can be driven both by consumers (lack of) individual capabilities, as well as by (bad) consumer market conditions. Figure 1
illustrates which groups of variables that are given attention in
the following analysis.
According to the model presented in Fig. 1, the probability
of experiencing consumer vulnerability as well as contributing

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Consumer vulnerability

H1:
H2:
H3:
ability

Older consumers lack more capabilities than others.


Lack of capabilities increases consumer vulnerability.
It follows: Old consumers experience consumer vulnermore often than others.

Theoretical framework

Figure 1 Analytical model.

to environmental vulnerability, depend on the consumers own


efforts and practices. These are expected to be affected by
consumers individual capabilities as well as by market conditions and situations. Due to group related opportunities and
preferences, practices might also be influenced by structuring
socio demographic group variables like age, gender and class.
The double arrow illustrates the interplay between consumers
and the markets: on the one hand (bad) market conditions
affect consumer practices, while on the other hand (unfortunate) consumer practices will work back on the market
conditions.
Consumer vulnerability is a complex phenomenon that has
been approached in various ways, (for a review see Baker
et al., 2005). Baker et al. (2005) claim that the field lacks consensus as to what exactly consumer vulnerability refers to, and
suggest a comprehensive model. In accordance with the model
presented in Fig. 1, Baker et al (2005) insist that group demographics (age, gender etc.) and individual characteristics (in
Fig. 1 termed capabilities) never equal vulnerability, even
though such factors may inhibit potentials for it. Rather, consumer vulnerability is understood as a temporary state of
powerlessness in marketplace transactions that to varying
degrees occur to all consumers, manifested in experiences of
vulnerability in consumption contexts.
Central to the model presented in Fig. 1, is that it separates
capabilities and vulnerabilities. In many previous works, vulnerabilities and the lack of capabilities have been treated as
more or less the same variable. As an example, Zaidi, one of
the architects of the Global Age Watch Index (2014) and the
Active Ageing Index (2014), states that: People are inherently
vulnerable when they lack the capabilities to exercise choice
and freedom in doing things they value and/or to cope with
threats they face without suffering damage (Zaidi, 2014, p. 4).
That is, he defines vulnerability by the lack of capabilities that
provide vulnerability. In this present article, however, capabilities and vulnerabilities are treated as separate entities. More
precisely, reduced capabilities are treated as possible individual,
internal vulnerability drivers, distinguished from external vulnerability drivers composed by markets varying consumer conditions. The following research questions will be addressed:
 How does age affect the capability pattern?
 How does capability affect vulnerability?
 Who are the vulnerable consumers?
 Who contributes to environmental vulnerability?
 What are the main vulnerability drivers?
The main assumption behind the research questions can be
formulated by the following hypotheses:

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Following the European Commissions Consumer Scoreboards


(European Commission, 2012a, b), the Empowerment Study
(European Commission, 2011) and the European Health and
Consumer Protection Directorate Generals approach to vulnerability (European Parliament, 2012; European Commission,
2013), as well as a broad range of applied research on consumer practices and choices performed at the National Institute
for Consumer Research in Oslo, we designed a study of general
consumer vulnerability but focused particularly on older people.
Theoretically our approaches lean on the capability approach
(Sen, 1985, 2009), practice- and choice-theory (Simon, 1957;
Berger and Luckmann, 1966; Luhmann, 1979; Schwartz, 2004;
Berg and Gornitzka, 2012), behavioural economics (Thaler and
Sunstein, 2008; Kahneman, 2011; Mullainathan and Shafir,
2013) and aging theory (Daatland and Solem, 2011).

The capability approach


The capability approach (Sen, 1985, 2009) is one of Sens
many contributions to the social sciences and policy making. It
is foremost the lack of capabilities and what it means for the
welfare of people that is central to Sens development of the
concept. Individual capability reflects the level of an individuals resources, composed by each individuals set of capabilities. The capability concept is closely related to the freedom to
choose more precisely to peoples different choice opportunities. A persons capability is his or her overall resources such
as knowledge, available time, physical abilities, social network,
financial situation, and so forth i.e. everything that determines
a persons advantages and opportunities. The more capabilities,
the more opportunities a consumer has. According to Sen,
capability is a kind of power that gives freedom (Sen, 2009).
However, is consumer vulnerability a reflection of opportunities? Typically, wealthy people have more choice opportunities
than people with limited financial resources but being financially capable with the best opportunities need not guarantee
good consumer practices. Rich people often act in a less economically rational way than people with scarce financial
resources (Mullainathan and Shafir, 2013). This is explained by
operation of a scarcity-mechanism: financial scarcity forces
trade-off thinking. While the rich can afford to make careless
consumer choices, the poor have to be experts in value. However, poverty can also activate a complementary mechanism
named tunnelling leading to unfortunate choices: scarcity captures attention and thereby influences individuals cognitive
capacity, self-control and executive control (Mullainathan and
Shafir, 2013, pp. 4955). In other words, capabilities can be
related to mechanisms pulling in different directions, and it is
an empirical question whether (and how) the lack of capability
influences consumer vulnerability.
Sen also emphasises the difference between capabilities and
practice; not to eat meat can be the result of poverty, as well
as the result of a rich vegetarians free choice (Sen, 2009). We
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interpret this as another argument for separating capability and


vulnerability and it certainly challenges and limits how vulnerability should be operationalized.
To feel empowered as a consumer is similar to being capable. In 2010, the empowerment study was conducted by the
European Commission and Eurostat. It was, for example,
expected that empowered consumers would show more reflexive consumer practices, hence be less exposed to consumer vulnerabilities. It turned out, however, that high national levels of
consumer empowerment was not always followed by better
consumer practices. Norwegian consumers, who had the highest
average score on the empowerment index of all 29 countries in
the study, were the least likely to read terms and conditions
before signing a contract (Berg, 2011; Special Eurobarometer,
2011).
In our understanding, gender, age and class cannot in themselves be considered as capabilities. What is policy relevant
here, and sociologically interesting, is whether or not capabilities are unevenly distributed according to age, as well as to
gender and class.

The consumer choice approach


Citizens in modern Western societies often believe that more
choice means better options and greater satisfaction. Schwartz
(2004), however, addresses the dark side of too many choice
opportunities. He claims that complex and extensive consumer
markets with almost infinite possibilities for choice can easily
be perceived as overwhelming by the individual consumer,
eventually leading to decision-making paralysis. Worse still in
a culture that tells us that there is no excuse for falling short of
perfection when your options are limitless, too much choice
can lead to clinical depression. The reason, Schwartz explains,
is that excessive choice opportunities give unrealistically high
expectations, and these lead to more disappointments and lower
satisfaction. Bad choices are likely to be perceived as an individual responsibility. Furthermore, one could almost always
have made a better choice (Schwartz, 2004).
No person can possibly give every choice he/she meets during the day the attention it deserves. In their everyday lives,
people have to bypass and ignore several choice situations.
Instead, people develop and follow their own habits and routines, as well as relying on socialized behaviour (Berger and
Luckman, 1966). Other solutions for choice overload can be to
reduce complexity by only considering familiar and trusted
alternatives (Luhmann, 1979), or to navigate by intuition and
heuristics (Simon, 1957; Kahneman, 2011).
New products and markets that invade and conquer more
and more of our everyday lives increase the complexity of the
consumer role. Berg and Gornitzka (2012) claim that because
of consumers limited attention capacity, it is today virtually
impossible to keep well informed and make reflexive consumer
choices in all the markets a modern consumer needs to visit.
Instead, guided by their own selective preferences, people
develop different and sectorial consumer competence profiles.
More precisely, people keep informed on some, but neglect
other consumer areas. Hence, anybody can be affected by consumer vulnerability, especially when visiting their neglected
areas.
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L. Berg

The behavioural economics approach


Helped by the 2008 financial crisis, behavioural economists
have succeeded in substantially dislocate the power of the
rational man as the basic guiding principle in construction of
market and consumer policy. Contrary to rational choice
theory, behavioural economics demonstrates and explains why
apparently free choices often appear not to be in the choosers
own interests. Experiments have demonstrated convincingly
that people in choice situations are often victims of their own
psychological weaknesses, and that to manipulate choices is
easier than people would like to think (Thaler and Sunstein,
2008; Kahneman, 2011).
Behavioural economists have mapped several predictable
irrationalities caused by cognitive biases, like peoples tendency to be loss and risk averse, as well as unrealistic optimistic, overconfident, status quo-oriented, conformity-oriented and
resistance-averse. Also, people often suffer from myopia, making inconsistent time-preferences (Thaler and Sunstein, 2008).
Further, Kahneman (2011) describes how people alternate
between two different ways of thinking; system 1 is fast, effortless, intuitive and emotional, while system 2 is slow, requires
effort, and is calculating and rational. As our overall capacity
for mental effort is limited, we tend to rely on system 1.
Insights from behavioural economics give reason to believe
that most people are prone to consumer vulnerability.

Aging theories
Aging is an inevitable aspect of life, and important for peoples
positions in key social institutions like the family, the school,
the workplace, the community and in the welfare state (Daatland and Solem, 2011). Aging is expected to be accompanied
by changes in an individuals capabilities. On the one hand, we
expect older people to have accumulated age related disabilities
that could impede their consumer activities, and that they might
not have the same incentives as younger people to keep
updated on new products and markets. On the other hand, older
people have more experience than younger people at least on
some consumer matters and they probably have more available time for information retrieval before making their choices.
In the qualitative pilot among older people prior to this study
(Berg, 2013) one impression was that older people had little interest in the renewal of durable goods. One said, . . . I like my old
car, and I like my old trousers, I shall not buy anything! Few
informants had bought, and none of them mastered, the new
smartphones. A participant who had bought himself a smartphone
gave it to his grandchild after a few frustrating days saying that
his . . . fingers [were] too big! They continuously hit three letters
instead of one! Another participant who had a smartphone confessed he only used it to make calls and send SMS messages.

The generational effect


According to Hagestad (2002) the life course perspective
reminds us to respect the power of history, and to recognize
how historical conditions and events affect how we live our
lives and how we see things. The participants in the pilot study
(Berg, 2013) gave evidence of a strong generational effect from
growing up during and after the Second World War. All

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informants commented on the incredible transition from scarcity of almost everything when they were young to todays
almost unlimited assortment of products. Many expressed concern for the lifestyle and preferences of younger generations
who are growing up in todays affluent society. Independent of
class background, our informants opposed to what they considered to be squandering money, especially with regards to wasting food. As one said . . . Wasting food is lack of culture.
One strong assumption drawn from the pilot was that older
people were more conscious of prices and quality than younger
people. Some were ironic about their own frugality and thrift,
laughing over the fact that even with large savings in the bank,
and no heirs, they found it difficult to escape their economical
way of thinking and acting when, for example, choosing
foods. . . Cant help it, thats just how I am!.
Similarly, studies from Norway indicate that older generations,
although they are less interested and engaged in sustainable consumption campaigns, still show a much greener consumer pattern
than younger generations. Based on life course theories, one
explanation why older people show more modest consumption
patterns is that they grew up in a time period when it was important to economize and take care of the resources (St, 2008).
Elder (1999) suggested that historical, cultural and social situations at a young age had large effects on peoples attitudes
and preferences throughout their lives. After the Second World
War, Norway was a poor country with rationing and scarcity
but, with the discovery of North Sea oil, economic growth
started to accelerate in the 1970s. As a consequence, todays
older people have experienced large improvements in welfare
benefits during their life courses. They have witnessed how the
markets and the supply of consumer goods and services have
changed dramatically since they were young (Berg, 2013).

Older people in Norway


Data analyzed in this article was collected among people living
in Norway. Living conditions, as well as consumer conditions,
vary considerably across the world. It is, therefore, difficult to
generalize results presented here to older people elsewhere.
However, some countries are more similar to Norway than
others. According to the Global Age Watch Index (2014) Norway should be the best place to be old (601) in 2014, followed
by Sweden, Switzerland, Canada, Germany, the Netherlands, and
Iceland. Contrary to the experience of many European countries
affected by the 2008 financial crisis, there has been a considerable increase in the household disposable incomes during recent
years in Norway. There has also been a large, historically incomparable, increase in the cost of housing, resulting in higher debt
burdens among the younger generations while older generations
find that their already paid-for houses are increasing in value. In
other words, there has been a drift in wealth in favour of the
older generations (Solheim and Vatne, 2011; Norwegian Statistics, 2014). Furthermore, many of todays older people are modest in their lifestyle and have saved money through their lives,
despite low incomes (Daatland and Solem, 2011).

Methods
This projects research design consisted of an explorative qualitative pilot study (Berg, 2013), followed by a large quantitative

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Consumer vulnerability

survey where the hypotheses generated from the pilot were


tested and further investigated. This article presents main findings from a computer assisted telephone interview survey of
2100 people between 18 and 95 years old conducted during
March 2014 by Respons analyse AS.

The pilot
The purpose of the qualitative introductory pilot was to uncover
mechanisms related to vulnerability among older people in their
role as consumers. In the selection of participants, we strived
to include singles and couples, women and men, from different
social strata. In the pilot, 18 participants 10 women and 8
men contributed with their reflections and lessons learned
from their long experiences as consumers. They appeared to be
unexpectedly resourceful and reflexive. Their stories challenged
our a priori assumptions, i.e. that older people were vulnerable
as consumers. However, due to the willingness to participate in
such interviews and self-selection mechanisms, it was possible
that they were more capable than average, and not representative of their age groups (Berg, 2013).

The survey
The aim of this survey was to test out and generalize the
hypotheses drawn from the pilot study, as well as to test the
assumptions underpinning this project. Based on the theoretically grounded model (Fig. 1), a questionnaire was constructed
containing questions about respondents practices, experiences
and evaluation of the food, electronics and banking markets in
addition to several questions about consumer relevant
capabilities.
To give special attention to older people, specific methodological approaches were required. First, our sample was
extended to include people older than the common age limit of
80 years thus covering a population between 18 and 100 years.
A precondition for participating in the survey was that the
respondents were living in their private homes (not in institutions). Second, to analyze older cohorts, older people were
oversampled. Third, to secure representativeness among the
older cohorts, a web-based survey was ruled out. Therefore,
this study is based on a telephone survey among people aged
18100 years, divided in seven age groups, each group containing 300 persons.
Stratified by geography and gender, the respondents were
drawn randomly from the telephone directory. To get nationally
representative results, the totals presented in this article are
weighted according to gender, age and geography. Results split
on age groups are weighted by gender within the age group.
When the text refers to a gender within an age group, the
results are not weighted. According to the sampling methods, it
is the age-variable that is manipulated the most by the weighting procedures, especially meaning that, in the nationally representative totals, the youngest age group (1830) is weighted
up, while the oldest age group (80100), is weighted down.
To analyze the material according to Fig. 1, three indices
were constructed; the capability index, the consumer vulnerability index and the environmental vulnerability index. In the
next section, the univariate distributions of the variables within
the indices are presented, before the model and hypotheses are
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Figure 2 Indicators for the reduced capability index. Percent affirmative answers. Weighted by age, gender and geography (N 5 2100). [Color figure
can be viewed in the online issue, which is available at wileyonlinelibrary.com.]

examined using multivariate step-analysis. Finally, in search of


further explanations, and to distinguish the main vulnerability
drivers, the capability-variables are given closer examination.

Results
The capability index
Based on 16 different individual capability indicators, covering
various kinds of resources expected to be important for consumer activity, we can draw the following picture of the lack
of capabilities among consumers in Norway.
The reduced capabilities listed in Fig. 2 can be organized
in the six following groups: Health capability difficulties
(reduced vision, allergies, disability, shopping centre anxiety)
that affect the consumer role were relatively widespread. The
most commonly reported capability problem appeared to be
reduced vision, and almost one in four reported that this
could complicate their consumer role performance. This
could mean that many people not only have problems reading
content lists, but also that their reduced vision can hinder the
comparison of prices. Twelve percent said that they have
allergies, over-sensitivity or health problems requiring special
diets. We should mention that young women under 30 were
heavily overrepresented in this group (21% compared with
6% men of the same age). Seven percent reported that they
were physically disabled, meaning that they have problems
moving around in ordinary shops, or getting to the shops.
Shopping centre anxiety also affects 7%, and according to
our material, men contrary to what we expected did not
diagnose themselves with shopping centre anxiety more often
than women.

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The second most cited capability problem is the shortage of


time. Approximately one in six (16%) stated that they were
normally short on time when making purchases. This means
that they often did not have sufficient time for making comparisons between prices and products before making their choices.
We would like to add that women in their 30s and 40s probably the most frequent shoppers were highly overrepresented
among those who perceived themselves as lacking time. In this
phase of life, many women find themselves in the middle of a
battle for time between different roles. Almost every third
woman in this age group (29%) said they lacked time to fulfil
the consumer role.
Competence capability (economic awareness, calculating
skills, reading/language skills) relates to abilities, skills and
knowledge. The third most cited capability problem was economic awareness and approximately one in eight (13%) admitted to failings on this. However, this percentage is probably an
underestimate because of the social desirability-mechanism
(people want to appear as sensible and knowledgeable, and
some respondents tend to adjust their answers accordingly).
The data also revealed that one in ten (10%) lacked calculating
skills, and that 6% lack reading and Norwegian language skills
that could affect their consumer role.
Social network capability was based on whether respondents
had no one to ask should they need help for daily purchases,
electronic purchases or practical (not financial) help in paying
bills. We found that 12% had a weak social network that could
influence their consumer role. Only 4% said they needed help
for everyday purchases, and slightly more (6%) said they
needed practical help for paying bills. Older women (801
years) were overrepresented among those in need of such help
(24% and 19% respectively).

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Consumer vulnerability

Figure 3 Indicators for the consumer vulnerability index and the environmental vulnerability index. Percent positive answers. Weighted by age,
gender and geography (N 5 2100).

During the last decade digital capability has increased its


importance. One important change affecting the consumer role is
the transition to online banking. Today there are fewer bank
branch offices and to pay bills the old fashioned way is more
expensive than paying online. Eleven percent said they were not
familiar with online banking. Again, older people, but especially
older women, were highly overrepresented: as many as 64% of
the women in their 80s and 90s said they did not use the online
banks. Our results show that only 1% of the adult population
does not have a bank card, but again, especially the older women
are overrepresented. Furthermore, digital equipment is a prerequisite for digital capability. We asked respondents if they had
their own computer, their own tablet, and their own smartphone
and 6% of the population had none of these items.
Financial capability is, of course, central to the consumer
role. According to our results, 8% of the population have a
small financial buffer, meaning they cannot pay an unexpected
bill of approximately 60 euros without borrowing money or
doing without something else. On a related question involving
the respondents household, only 4% of all respondents
reported living in a poor household. On the one hand, these
results signal that most people in Norway have strong purchasing power and enjoy a good standard of living. On the other
hand, as there are relatively few people who are poor in financial resources, such poor households probably have extra burdens being marginalized in a rich consumer society.

The consumer vulnerability index and the


environmental vulnerability index
Unfortunate consumer practices gathered from three different
segments of the markets are represented in Fig. 3. The markets

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foods, electronics and banking are selected because they


have rather different characteristics and require different consumer competences. And prior studies have demonstrated that
these markets are mastered differently by different socio demographic groups (Berg and Teigen, 2009; Berg and Gornitzka,
2012). Fig. 3 shows the response to our predefined unwanted
consumer practices related to the markets mentioned. The first
six indicators, which represent practices that are not considered
to be in the consumers own economic interests, were selected
for inclusion in the consumer vulnerability index. The next
eight indicators are expected to also contribute to environmental vulnerability, hence are utilized in the construction of the
environmental vulnerability index.
Two of the markets, food and electronic products, belong to
the consumer goods markets and can be tentatively compared.
As people engage with the electronics markets less frequently
than the food market, the time period was adjusted accordingly.
Banking belongs to the consumer service markets, meaning that
direct comparison with the other two is even more problematic.
According to Fig. 3, the first impression is that the Norwegian food market presents many possibilities for vulnerability.
Three out of four respondents (74%) said that they might pay
too much for food items because they do not compare prices or
visit different stores. Two out of three (67%) said they had
thrown leftovers during the last two months, and more than
half (55%) had thrown food away because of its expiry date
over the same period, indicating rather high levels of overpayment and food waste in Norwegian households. Such practices
are neither beneficial for the individual finances, nor for the
environment. Further, according to the results, 30% said they
had been tempted by the 3-2-1 marketing strategy (buying three
items for the price of two when only needing one) during the

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Figure 4 Who lacks consumer


capabilities and who is vulnerable?
Path-analysis based on three linear
regression models. Significant standardized beta coefficients P < 0.05
(N 5 2097). [Color figure can be
viewed in the online issue, which is
available at wileyonlinelibrary.com.]

last months. Such practices are problematic from both consumer and environmental perspectives.
Although fewer than in the food market, but still 36% of
respondents, said they might pay too much for electronic products because they do not compare prices. One in four (25%)
admitted to have thrown usable electronics away during the last
two years, and 17% did not recycle their electronic products.
Norwegian consumer authorities have recommended consumers
to rely on Kjpsloven (Sale of Goods Act 01.07.2002) and not
to buy extended product guarantees. Still, 33% of respondents
said they had bought such guarantees during the last two years.
Despite the different characteristics of the food and electronics markets there is reason to believe that the food market contains more vulnerability drivers than the electronics market.
One explanation could be different price levels, and that consumers are more reflexive when searching for more expensive,
durable goods. With reservations, the banking market could
possibly be ranked between the two consumer goods markets
as 55% of the respondents said that they might pay more interest rates than necessary because they do not care to switch
bank or to renegotiate their conditions.

Who are the vulnerable consumers?


In the following, the studys hypotheses will be tested by reference to the analytical model presented in Fig. 1. Lack of consumer capability is measured by an index summarizing the
answers on the 16 indicators presented in Fig. 2. Similarly, degree
of vulnerability is measured by six and eight predefined unfortunate consumer practices seen from respectively the individual consumer and environmental interests, as presented in Fig. 3. In
addition to age (scale level), we include the following sociodemographic group variables expected to have some structuring
impact on individual capabilities and consumer practices: gender
(women 5 1), civil status (single 5 1), family situation (small children families 5 1), and class affiliation (working class 5 1).
The multivariate step-analysis presented in Fig. 4 illustrates
our data on the following questions: Are capabilities evenly
distributed in the population, or do some groups, like older
people, seem to lack more capabilities than others? Does the
lack of capabilities affect level of vulnerability? Who are the
vulnerable consumers? Who are the consumers who contribute
to environmental vulnerability?

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Figure 4 clearly shows that capabilities are not evenly distributed in the population. As expected, the older one gets, the
more capabilities one lacks. All independent variables, except
gender, have their own significant effect on the number of
capabilities. As an example, while old, single people from the
working class lack many capabilities, young couples without
children from the middle class are rich in consumer
capabilities.
When we follow the path from number of lacking capabilities on the dependent variables, while controlling for the background variables, there is a weak significant (0.06) effect on
individual consumer vulnerability, and no effect at all on environmental vulnerability. This means that it is the direct paths
from the background variables that affect the vulnerability patterns the most.
The age variable shows the strongest direct effect on both
vulnerability variables. But contrary to the expectations underpinning this project, it is not the old, but primarily young consumers, who are more likely to experience consumer
vulnerability. In addition, according to our material, young people, male consumers and families with small children seem to
follow more environmentally hostile practices than others.
The results presented in Fig. 4 support the first two conditions of our first hypothesis, that (a) older people lack more
capabilities than others; and that (b) people who lack many
capabilities are more vulnerable as consumers than others.
However, our analysis rejects the idea that (c) older people are
more often exposed to consumer vulnerability than others. Our
expectation (if a and if b, then c) was rejected.

What are the main vulnerability drivers?


To search for explanations of the counter-intuitive results presented, we need to examine the capability index, and investigate the strength of each of the capability indicators on
consumer and environmental vulnerability. This will enable us
to distinguish the main vulnerability drivers.
While the positive effects represent vulnerability drivers, the
negative effects should be read as vulnerability inhibitors.
According to Fig. 5, the main vulnerability drivers are (selfdeclared) poor economic awareness and lack of time. These
capabilities influence both individual consumer vulnerability
and environmental vulnerability. The results also indicate that

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Consumer vulnerability

Figure 5 Lack of capabilities as


vulnerability drivers. Two linear
regression
models.
Significant
standardized
beta
coefficients
P < 0.05 (N 5 2063). [Color figure can
be viewed in the online issue, which
is available at wileyonlinelibrary.com.]

people with poor calculating skills, as well as people living in


households with scarce financial resources make economically
unfortunate consumer choices more often.
Somewhat unexpectedly the negative effects in Fig. 5 indicate
that a lack of capabilities can also work as vulnerability inhibitors.
There is a negative effect from being allergic and in need of a
special diet on the probability of contributing to environmental
vulnerability. This might be an example on how reduced capability can stimulate to more conscious consumer practices. If it takes
more effort to find safe edible foods, this might stimulate a more
conscious consumption pattern. However, the results also indicate
that those who do not use online banks, as well as those who lack
digital equipment, are less vulnerable measured by their unfavourable practices. These capabilities are crucial resources for modern
consumption and we know that it is older people who lack these
capabilities, and the negative effects might be caused by reduced
activity in the market. In other words, it is rather the generational
effect, and not the lack of digital equipment and online practice
that is the main force behind more environmentally friendly and
economical reflexive practices. Still, not being online also prevents risky online practices.
Finally, to find explanations to the counter-intuitive result in
Fig. 4, we also need to investigate how the detected vulnerability drivers are distributed according to age:
Figure 5 showed that poor economic awareness and the lack
of time are the main vulnerability drivers. According to Fig. 6,
the older you are (except the youngest cohort), the less likely it
is that you lack these capabilities. In other words, the explanation for why older people do not appear as vulnerable consumers is that they are rich in the capabilities that are important to

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master the consumer role. They are rich in time and, when they
were young and adaptive, this generation learned to be aware
of economic factors.
We should also note that poor calculating skills a third vulnerability driver is highly overrepresented in the youngest
age group. According to our data, young women are particularly overrepresented in this group (17% compared with 13%
of the young men). The last vulnerability driver, bad household
finances, is also more common for the youngest age group,
probably because many in this age group are students or in
poorly-paid employment.
On some of the capability indicators the variation by age is
quite large, especially on indicators that according to Fig. 5
should be considered as vulnerability inhibitors. Some 57% in
the oldest age group, compared with 3% in the 3050 age
group said they did not use internet banking. The same dramatic age differentiation can be seen among those who say
they lack digital equipment and do not have a computer, tablet
or smartphone.
The impression from Fig. 6 is that the bivariate distribution
supports the basic assumption that older people tend to lack more
capabilities than younger cohorts. The first eight capability variables listed from left to the right, illustrate a significant ageascending relationship. Among older respondents, the more frequent it is not to use internet banks; to lack digital equipment; to
suffer from reduced vision; to be disabled; to need practical help
for everyday purchases; to need practical help when paying bills;
to have a weak social network, and even though it does not
apply to many not to have their own bank card. In addition
except from the youngest age group the older they are, the more

291

Consumer vulnerability

L. Berg

Figure 6 Reduced capabilities in different age groups. Percent affirmative answers. Weighted by gender within age groups (N 5 2100).

often people report having a very small financial buffer and could
not pay an unexpected bill of 60 euros.
The next four indicators poor calculating skills; need of special foods; poor reading/speaking ability and shopping centre anxiety, show weak or inconsistent age differentiation. The last three
capability-indicators poor economic awareness; lack of time
and bad household finances, show significant an age-descending
relationship: Here, the younger the respondent, the more probable
it is that they report a lack of these capabilities. One should notice
that compared with the small financial buffer variable, bad
household finances shows the opposite pattern. In other words,
very few older people, compared with their buffer sizes, consider
their household financial situation as bad. Perhaps this is a
reflection of the generational effect discussed earlier.

Discussion and conclusion


According to this study, the main vulnerability drivers are lack of
time and poor economic awareness, as well as poor calculating
skills and bad household finances. This explains why it is mostly
younger respondents, rather than older people, who appear to be
vulnerable consumers and contribute most to environmental vulnerability. In other words, the analysis rejects the assumption
underpinning this project, namely that older people constitute a
vulnerable consumer group because the number of capabilities
decreases with age. On the contrary, we found that older people
as a group have a greener consumption pattern, and they are less
often victims of consumer vulnerability. These findings support
some of the impressions gained from the earlier qualitative interviews among older people who appeared surprisingly capable as
consumers. The quantitative analysis presented here indicates
that the informant group was more representative of older people
today than we first assumed.

292

Do the results presented in this article mean that there are no


reasons to worry about consumer vulnerability among older
people in an aging society? Well, this depends on whether or
not future generations of older people will act as prudently as
those of today. More precisely, a crucial question is whether
the main results primarily rest on an aging effect that will also
characterize future generations of older people or a generational
effect, expected to change for future cohorts growing up in
increasingly wealthier circumstances? If we turn to the vulnerability drivers, abundance of time in later years, is certainly
related to the retirement phase, hence is an ageing effect. Also,
older people in the future may take advantage of their relative
lack of time pressure. Economic awareness, however, is more
likely to rest on a generational effect shaped by adolescence
during and shortly after the Second World War. According to
our results, the poor calculating skills are a problem mostly for
those under 30 years. Will their calculating skills improve with
age, or is it a new kind of generational effect originating
from an educational system that failed to stimulate mathematical competencies (PISA, 2012)?
While todays older people can be characterized by a fortunate combination of the ageing effect (abundance of time) and
generational effect (economic awareness), there are reasons to
believe that those who will be in their 70s in 2050 will be only
favoured with the ageing effect (abundance of time) combined
with two negative generational effects originating from their
upbringing in affluent societies, and with too little mathematical education. If true, there is reason to worry about future
older consumer capabilities and vulnerabilities.
This article claims that older people should not be considered
a vulnerable consumer group. Rather, as a group, older people
appear as experienced, resourceful and reflexive. This does not

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V

L. Berg

imply that older people master every consumer market, electronics products for example, or that older people should not be
considered vulnerable in other aspects of their lives. Nor can
we say that all older people are consumers empowered with
time, economic awareness and financial capability.

Implications
These results give reasons for concern about the way that older
people are lagging behind in the rapid digital evolution of consumer markets. New digital equipment and purchasing channels
are to a very limited degree utilized by older people. There is
reason to believe that the digital evolution will continue and
that this pattern of digital deficit will be repeated by future
generations of older people.
However, these results first of all support the argument for
public investment to improve mathematical education, as well
as to improve young peoples financial capabilities (see, for
example, CFEE 2014) and their household knowledge. One
measure could be the strengthening of personal finance and
home economics as obligatory courses in high school.

Acknowledgements
A consortium of representatives from the Ministry of Children,
Equality and Social Inclusion, the Consumer Ombudsman, the
Norwegian Consumer Council, and National Institute for Consumer Research in Oslo has contributed with their insights and
critics in this project. A prior version was presented and discussed
at the International Conference on Consumer Research: Challenges on Consumer Research and Consumer Policy in Europe,
September 2014 in Bonn, Germany. I would also like to thank
my editor and my two anonymous referees for all comments and
language corrections that substantially improved this article.

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