Chapter 4 – Consumer Literacy and Education: Summary
4.1 Better Educated Consumers
Canadian consumers, on average, are more highly educated than ever. The general increase in education levels gives rise to more efficient consumer behaviour. In addition, higher education levels suggest a general increase in the ability to afford consumer goods and services: post-secondary education is key to entering into today's skill-based labour market. However, these rising education levels have come at an increasing cost: since 1980, the tuition fee component of the consumer price index (CPI) has grown at twice the average rate of the all-items CPI. At the other end of the spectrum, a significant number of Canadians still possess a relatively low level of education, and are at continuing risk of further exclusion in a world of continuous learning.
Research opportunities include further analysis of the combined effect of improved education and higher debt on participation in the marketplace. A deeper understanding of how less literate consumers – particularly youth – deal with the marketplace would also be useful, as they are likely to be more vulnerable and susceptible to fraud.
4.2 Consumer Literacy Challenges
A significant proportion of Canadians face literacy challenges, particularly elderly Canadians. This is cause for concern given how literacy is essential for most consumption decisions. Poor consumption decisions arising from low literacy skills may result in financial or material cost to the consumer, and the interplay of poor literacy skills and consumption of health products may increase real, physical risks. Financial literacy in particular is critical to managing one's money in today's marketplace, as the principle of disclosure is behind many aspects of consumer protection policy in the financial services sector.
Research opportunities include identifying ways of improving real access to consumer information for the large proportion of Canadians with less-than-adequate literacy skills. With respect to seniors' literacy, a thorough analysis of risks to their well-being could shed light on ways to improve their interaction with the marketplace. Finally, further research into financial literacy could include assessment of consumers' financial knowledge and of how well information disclosure enhances consumer protection.