Consumer price knowledge before and after the euro changeover

Abstract

This article examines how the price knowledge of Finnish consumers has changed since the adoption of the euro. Our study measures price knowledge by comparing consumers’ price estimations with actual market prices at two points in time: before (October 2001) and after (March 2002) the changeover to the euro. Furthermore, we study potential differences between three different age groups. We approach the issue using four determinants, namely (1) response percentage (the percentage of respondents who were able to give a price estimate); (2) the difference between the median of the market prices and the median of the price evaluations; (3) the difference between the average of the market prices and the average of the price evaluations; and (4) the average of the absolute deviations between the average of product prices and consumer price evaluations. Our results indicate that, on average, consumers know the prices of grocery products quite well despite the prevailing dispersion of actual prices in the market. Price knowledge was found to be rather good both before and after the introduction of the euro. Nevertheless, the good price knowledge after the changeover was probably because consumers remembered the prices asked in the old currency and converted them to euros. The majority of respondents were able to give price estimates that were within the range of actual price dispersion in stores. The results also show some deterioration in price knowledge after the advent of the euro. There was variation between different age groups, and it seems that the introduction of the euro has affected various groups differently. Consumers aged 30–50 years knew prices best both before and after the euro, whereas the ability to estimate prices had declined most among consumers above 50 years after the euro changeover.

Interaction effects of mood induction and nominal representation of price on consumer choice

“…However, in field studies the influence of the nominal representation is difficult to disentangle from the many other factors influencing the problems consumers face. Different segments of the population may experience more difficulties than others (Aalto-Setälä & Raijas, 2003;Vissol, Layani, & Ramón, 1999;Ranyard, Burgoyne, Saldanha, & Roth, 2005;Burgoyne, Routh, & Ellis, 1999), and there are differences between countries in the adaptation to the euro (Marques & Dehaene, 2004). The experiments conducted in order to investigate the influence of the nominal value have therefore been done in laboratory settings in which many of these variables are controlled for.…”

The Price Knowledge Paradox: Why Consumers Have Lower Confidence in, but Better Recall of Unfamiliar Prices

“…These questions included three agree-disagree questions elicited on a seven-point scale ("I frequently buy sunflower oil," "I know the different brands of sunflower oil," and "I believe that national brands of sunflower oil are higher quality than private label brands") 1 and the purchase frequency for the brand (−3= Never; 3=Always).…”

“…Studies examining the effect of the currency changes on long-term price knowledge have found inconsistent results in terms of whether price knowledge has improved or worsened [1,2,19]. Aalto-Setälä and Raijas [1] asked consumers to estimate prices before and after the Euro introduction in Finland and found that consumers were more inaccurate after the Euro introduction.…”

“…Aalto-Setälä and Raijas [1] asked consumers to estimate prices before and after the Euro introduction in Finland and found that consumers were more inaccurate after the Euro introduction. On the other hand, Schneider and Kelemci Schneider [19] who examined the effect of the devaluation of the Turkish lira found no deterioration, but, in fact, a slight improvement of price knowledge.…”

The Euro Illusion in Consumers’ Price Estimation: An Italian–Irish Comparison in the Third Year of the Euro

“…This umbrella term refers to a series of transient asymmetries that can be observed when different groups of participants are asked to perform the same judgment or choice task in a different currency (Aalto-Setälä and Raijas 2003;Gamble et al 2002Gamble et al , 2005Jonas et al 2002;Raghubir and Srivastava 2002;Soman et al 2002;Tyszka and Przybyszewski 2006). The mere difference between the nominal values of two different currencies in which the same price-related task is performed (for instance, the euro and the Italian lira) produces asymmetries in consumers' intuitive judgments or choices, despite the fact that the real value of money is the same.…”