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3 Welfare Rev. 1 (1965)
Consumer Practices of the Poor

handle is hein.journals/welfinre3 and id is 389 raw text is: CONSUMER PRACTICES OF THE POOR LOUISE G. RICHARDS* TO THE ECONOMIST, being poor means having an income below a certain figure- -a figure that represents the mini- mum amount necessary for a decent life in America today. To the behavioral scientist, being poor means a number of characteristics that have been found to be associated with low income: patterns of family life, health care, education, and general outlook on life. To the poor per- son himself, however, being poor may mean different things depending on how his money is spent. This report is a summary of research findings on those consumer practices. The report covers not only how money is spent by the poor, but also what kinds of behavior--shopping, methods of payment, and the like--go along with income disbursement. Few would quarrel with the judgment that an income of $3,000 is too low for a family to live on today. Hardly anyone would suggest that even -the best con- sumer practices would solve the problem of poverty. Many would agree, however, that good consumer practices might al- leviate some of the worst aspects of poverty. Thus, knowledge of' these practices can suggest new areas for edu- cation and action. One writer on the topic of consumer practices of the poor has concluded the poor are ,irrational in their buying behavior Some of the evidence for that conclusion is included in this report. To indict poor consumers as irrational is *Research psychologist, special con- sultant, Division of Research, Welfare Administration. This paper was com- pleted before Dr. Richards assumed her present position in the Consumer Survey Branch, Food and Drug Administration. For references, see end of article. too simple an explanation, however. Moreover, it provides no handles for action. Much of the evidence for irra- tionality should be considered in the light of other explanations that make equally good sense. The particular social and demographic characteristics of the poor must be taken into account. The inflexi- bility of low-income per se must be kept in mind. And, finally, the possibility that apparent irrationality may stem from the very conditions of poverty must be dealt with. These explanations will be discussed more fully in a later section. Being a Rational Consumer For practices to be labeled as irra- tional there must be a standard for judg- ing their rationality. Many people would subscribe to the idea that there are good, common-sense rules for stretching in- come. Many of those who knew poverty during the Thirties, as well as those who have known severe reverses since, would avow that such rules helped them keep their heads above water in difficulttimes. . Most common-sense rules of financial management are applications of economic theory based on the idea that everyone naturally tries to get the best living for the least money. Recent thinking on the topic includes the idea that psychological satisfactions can be added to material ones in arriving at a calculus of values. The choices of low-income consumers, however, can; seldom admit outlays for emotional satisfactions, except perhaps for choices among low-cost items. Thus, the traditional rules are probably more pertinent today to the low-income con- Sumer's situation than to that of higher income groups with their larger margin for discretionary purchases. Very simply, the traditional rules for

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