Macro-economic determinants of consumer price knowledge: A meta-analysis of four decades of research

For the past four decades, dozens of researchers have studied consumer pric e knowledge, often with disagreements on the extent of consumer' ignorance about prices. While some of these disagreements have been attributed to res earch design variations among studies, no inquiry has yet been made on the role of the economic environment on consumer price knowledge. Nevertheless, environmental factors such as interest rates, unemployment, and economic g rowth may significantly influence consumers' knowledge of prices. Certain e conomic environments may therefore provide marketers with the ability to ut ilize pricing tactics which rely on limitations in consumers' knowledge of product prices. Using a meta-analytic framework, this paper synthesizes the results of 297 previous price knowledge studies to document the effects of inflation, unemployment, GDP growth, interest rates, country of study, and passage of time on consumer price knowledge. The meta-analysis results dem onstrate that economic factors have considerable influence on explaining va riations in consumer price knowledge. Managerial and public policy implicat ions of the findings in light of turbulent economic environments are discus sed. (C) 2001 Elsevier Science B.V. All rights reserved.