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The development of economic notions: Single sequence or separate acquisitions?
415
Journal of Economic Psychology 7 (1986) 415424 North-Holland
THE DEVELOPMENT OF ECONOMIC NOTIONS: SINGLE SEQUENCE OR SEPARATE ACQUISITIONS?
*
Anna Emilia BERTI, Anna Silvia BOMB1 and Rossana DE BEN1 University of Padova, Italy
Received October 8,1985; accepted May 28, 1986
The conceptions on shops and factories of a group of 3rd-grade children were assessed by means of the Piagetian clinical method. Factorial analysis showed that children’s answers about the two economic institutions yielded two distinct factors. Children were then divided into three groups (one control and two experimental); children in the experimental groups were taught, by means of two different training procedures, how the shopkeeper can earn a profit. A post-test interview, one month later, showed that both experimental groups had progressed in the target notion; however, children did not generalize to the factory what they had learned about shops. According to these results, 3rd-graders’ thinking about economics consists of separate part-systems, which will eventually become integrated as children grow older.
Introduction
During the last 10 years an increasing number of studies have been carried out on children’s conceptions of social structures in general and, more specifically, on children’s conceptions of economics. Most of these studies have been conducted within a Piagetian framework, and have been concerned with identifying similarities as well as differences between the development of social knowledge and that of intellectual operations (Berti and Bombi 1981; Furth 1980; Jahoda 1979, 1981). This field is typically characterized by the search for stage-like sequences and, more recently, by an attempt to validate these sequences by means of crosscultural research (Hong Kwan and Stacey 1981; Jahoda and Woerden* This study was supported by a grant from M.P.I. (fondi 40%). Requests for reprints should be sent to A.E. Berti, Dipartimento di Psicologia dello Sviluppo e della Socializzazione, Universita di Padova, via Beato Pellegrino 26,35317 Padova, Italy. 0167-4870/86/%3.50~1986, Elsevier Science Publishers B.V. (North-Holland)
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et al. / Economic socialization
bagch 1982; Jahoda 1983; Ng 1983). Two important issues that have not been greatly considered so far are how transition from one level to the next takes place, and whether the sequences through which different economic notions develop are related to one another. These two issues are interconnected: to the extent that developmental sequences regarding different notions are related, changes occurring in one may induce changes in the other. As far as the relations between sequences are concerned, a study on children’s conceptions about property and the functions of three means of production (factory, transportation and agriculture) has shown that children’s ideas about these means develop with differing rhythms through the same stage-like sequence (Berti et al. 1982). About how the transition from one level to the next occurs little is known. Jahoda (1979, 198 1) and Furth (1980) suggest that change takes place by means of conflict or ‘disequilibration’: becoming aware of the conflict between separate pieces of knowledge, children are led to restructure their conceptions. Both Jahoda (1979) and Furth (1980) found that some children changed their conceptions while being interviewed, and considered this an occurrence of the process of disequilibration. More recently, Ng (1983) has found that cognitive conflict produces a significant improvement in understanding the notion of bank profits in lo- to 13-year-old children. This article presents data from a larger study, conducted with two purposes: (1) to compare the effects of different training procedures on 8-year-old children’s understanding of shopkeepers’ profits; (2) to examine the relationships between children’s conceptions about shops and factories, and to check the degree to which changes in the former are generalized to the latter. Data pertaining to the first issue have been presented and discussed in detail elsewhere (Berti et al. 1986) and will be only briefly summarized here. We selected a group of children who believed that shopkeepers sell their goods at the same (or even lower) prices than they paid for them, and that the income earned in such a way is enough to restock the shop and maintain themselves. We then taught these children that shopkeepers increase retail prices with respect to wholesale prices; with some children we used a ‘critical’ procedure of training inspired by Piagetian method, with others a ‘tutorial’ one. Both trainings consisted of a game of buying and selling in which the child played the role of a customer, while two female experimenters impersonated a shopkeeper and her supplier. In critical training, the experimenter impersonating the shopkeeper sold her goods (ten handkerchiefs) at the same price she had paid for them. The
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child was then helped to realize that by so doing the shopkeeper did not make any profit, and to find out a way in which the shopkeepercould earn the money she needed both to supply her shop and to maintain herself. In tutorial training, the experimenter playing the shopkeeper’s role explained directly to the child that she would raise the retail price in order to earn enough money to make a living and restock the shop. While different in their procedural aspects, both trainings were designed to draw children’s attention to the following information: (1) to determine the amount of profit, the income and initial amount of money possessed by the shopkeeper must be compared; (2) the shopkeeper spends his money both on restocking the shop and making a living; (3) in order to make a profit, the shopkeeper must increase the retail price with respect to the price he paid. A partial analysis of pre- and post-test interviews, limited to children’s answers about the shop, showed that both trainings were effective in allowing children to improve their knowledge, slightly but significantly, about price determinations in shops. This means that children’s understanding of this particular economic notion develops both when they are given correct information and when they can discover inconsistencies in their judgments. A qualitative analysis of children’s behavior during critical training identified some difficulties children must overcome in order to understand the notion of profit (see Berti et al. 1986). In this paper we present data on to the second issue of the study, in which two different hypotheses may be advanced: Hypothesis 1. The shop and the factory are places where different actions occur; children generally come to know them in different circumstances and through different kinds of experiences: direct experience and observation in the case of the shop, verbal information in the case of the factory. As a consequence, knowledge about shops and factories should be organized into two groups of distinct script-like schemata, and improvement in one should not imply improvement in the other. Hypothesis 2. Factories and shops, although different, share one important characteristic: both sell goods in order to make a profit, which is the result of a difference between expenses and proceeds. If children’s knowledge is not organized into different schemata for different kinds of businesses, but into more abstract schemata such as ‘buying and selling’, ‘price determination’ and ‘profit’, training about shopkeepers’ profit should be effective for factory profits too.
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Both these hypotheses might be true, each describing what happens at different age levels. In our study we examined 8-9-year-old children whose conceptions have been described as ‘part-systems’, midway between fragmentary and playful images characterizing the first levels of economic thinking and the systemic understanding of older children (Jahoda 1979; Furth 1980; Berti and Bombi 1981; Leiser 1983). We expected that for these children the factory and the shop would constitute two of such ‘part-systems’ not yet coordinated by means of more abstract schemata (hypothesis 1). In order to test both hypotheses, we analyzed the structure of children’s ideas about factories and shops prior to training. Then we checked whether the notion of shopkeepers’ profit, acquired during training, was generalized to factory profit in the post-test. Method Procedure and subjects The research design provided, first of all, for measurement of the children’s initial level by means of a pre-test, which consisted of a wide semi-structured interview about small-scale buying and selling and about factories. We interviewed 96 third-grade middle-class children (average age 8;3) at two schools in Padua (Italy). The concept of profit had not yet been taught in their classes. Children who already recognized that shopkeepers must raise retail prices in order to make a profit (n = 29) were discarded from the study together with those considered too backward to undergo the training, i.e., those who did not know that shopkeepers must buy the goods they sell (n = 5) and those who believed that shopkeepers did not need to make a living from their work (n = 2). The remaining children (n = 60) were randomly assigned to three groups labeled A, B and C. Each child from groups A and B was given the above-described training (‘critical’ for group A and ‘tutorial’ for group B). The interview was repeated after an interval of one month (post-test). Group-C children were given only the pre- and post-tests. Since some children were absent for the post-test, groups A, B and C were reduced to 16 children each (approximately 8 boys and 8 girls). The children were examined one at a time in a room made available by the school. Interviews were conducted using linguistic expressions similar to those used by children and going deeply into the answers in the way suggested by Piaget (1926). All answers were tape-recorded and transcribed.
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Interview contents and scoring The interview dealt with 12 different topics, which were separately scored. Tables 1 and 2 present the main questions about each topic, together with the scores attributed to the various answer levels. These Table 1 Small-scale buying and selling: interview topics, responses obtained and scoring. (1) How do shopkeepers determine the prices at which they sell their goodr? -They decide arbitrarily, just ‘thinking about it’ or ‘knowing it’, or follow arbitrary decisions by authorities, such as local councils, governments or magistrates -They consider ‘quality’ of goods (beauty, utility, size, etc.) and tix higher prices for better goods -They base decisions on prices paid for goods, leaving retail prices equal to wholesale prices, or they can lower or even raise them, but for reasons having nothing to do with profit -They add a quota to wholesale prices, since this is the only way they can earn from the transaction
1 2
3 4
(2) Whar do shopkeepers do with money acquired through selling? - They maintain themselves or restock their shops -They maintain themselves and restock their shops (answer given after interviewer’s prompt) -They maintain themselves and restock their shops (spontaneous answer)
2 3
(3) How do shopkeepers obtain money to maintain themselves? -They get it from sources external to their business (e.g., relatives, banks, govemment) -They earn it by selling their goods
1 2
(4) Where do the shop’s goodr come from? -The shopkeepers themselves make them -They buy them from one another -They buy them from producer’s, directly or through go-betweens
1 2 3
(5) How do shopkeepers obtain money to buy the goorLF they will sell? - They don’t have to pay for them -They pay with money from people having nothing to do with the shop -They pay with their earnings
1 2 3
(6) How do shopkeepers manage to earn? -They can ‘profit’ (i.e., provide for both their personal needs and shop restocking) even selling at wholesale prices or lower prices -They only ‘earn a little’ when they do not increase prices, or they can manage because of large numbers of customers - They mostly sell at prices exceeding wholesale prices (answer given with experimenter’s help) - They usually base on amount paid for goods, adding sufficient mark-up to provide for both personal needs and restocking
1
1 2 3 4
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Table 2 The factory: interview topics, responses obtained and scoring. (7) What function do factories serve? - They produce things
-They produce things and sell them
1 2
(8) Who pays the workers? -Someone external to the factory (council, state or banks) who gives money either directly to workers, or to owner who then pays them - The person who buys the products (shopkeeper or wholesaler) -The factory owner, with money obtained from sales
1 2 3
(9) To whom do the factories’ customers give their money? - To person transporting the goods (e.g., truck driver) who keeps it -To the workers - Directly to factory owner -To owner through an intermediary
1 2 3 4
(10) Who decides prices of goods sold by the factories? - Someone other than the producer (e.g., council, buyer, truck driver) - Producer (owner or workers)
1 2
(11) How is price of products determined? - Any price is chosen, or government decisions are followed - ‘Quality’ of product is considered -One or more of the production costs are taken into account -A quota is added to production costs, in order to make profits
1 2 3 4
(12) How - On - On - On
1 2 3
are the earnings spent?
personal expenses personal expenses, plus one of the production costs personal expenses plus two or more production costs
levels were determined by examining a number of transcripts and taking account of the developmental sequences of children’s ideas for each topic, as shown by previous cross-sectional studies (Berti and Bombi 198 1). The answers to each topic were then ordered according to their increasing complexity and/or correctness. Each interview transcript was scored by two independent judges, who agreed in 90% of cases. Discrepancies between their scores were never more than one level apart and were resolved by discussion. Statistical analyses To reveal the possible relationship between children’s ideas about buying and selling in shops and about industrial production, we first
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carried out a varimax rotated factor analysis. On the 12 scores obtained in the pre-test by all the children from groups A, B and C, 4 factors were extracted, for 60.3% of the total variance. To check the generflization of the trained notions, we compared the pre- and post-test scores on price determination in shops (table 1, topic 1) and factories (table 2, topic 11). A 3-way ANOVA (3 x 2 x 2) with independent measures for the first factor (groups A, B and C) and repeated measures for the other two factors (pre- and post-test and considered concepts) was carried out. Results
Factor analysis revealed the existence of two interpretable factors, the first with high loadings of items relating to the factory, the second with high loadings on three of the items relating to small-scale buying and selling (tables 3 and 4). These two groups of items therefore seem to be separate, at least in the pre-test. The ANOVA showed the following significant effects: (1) a main effect of pre- and post-test measures (F(1,45) = 16.758, p < 0.001); (2) an interaction between pre- and post-test measures and the two considered concepts, i.e., price determination in shops (s) or factories (f) (F(1,45) = 17.74,p < 0.001); (3) an interaction between groups (A, B and C), pre- and postTable 3 Items comprising first factor and relative saturations. Topic Topic Topic Topic Topic
7: 9: 10: 11: 12:
What function does the factory serve? To whom do the factory’s customers give their money? Who decides the price of goods sold by the factory? How does the person in charge of it determine the prices of products? How are earnings spent?
0.70 0.65 0.67 0.47 0.59
Table 4 Items comprising second factor and relative saturations. Topic 2: What do shopkeepers do with money acquired by selling? Topic 5: How do shopkeepers obtain money to buy goods they sell? Topic 6: How do shopkeepers manage to earn?
0.36 0.81 0.35
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2.4. .
e----4 c.-.d
GA GB GC
2.2.
2.0-
1.6-
1.6-
1.4.
1.2 PRE TEST
POST TEST
Fig. 1. Mean scores of groups A, B and C on the questions on price determination in shops and factories. Note: s = shops, f = factories.
test measures and the two above-mentioned concepts (s and f) (F(2,45) = 4.105,~ < 0.022). Post-hoc analysis, conducted using the Neumann-Keuls method, showed that groups do not differ in their degree of knowledge about the two concepts in the pre-test; on the post-test groups A and B appear significantly superior to the control group only in the trained concept, i.e., how shopkeepers determine retail prices in order to make a profit (see fig. 1). Only 6 children in groups A and B made progress in this area and arrived at the correct notion (level 4); 8 children reached level 3 and 4 reached level 2. Instead, with regard to factory prices, only one child progressed, passing from level 3 to level 4. These results support hypothesis 1 (see above). They indicate that although training on how shopkeepers determine prices affects children’s conceptions in that specific field, it does not allow them to generalize these conceptions to another, analogous, case.
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Discussion and conclusions Results indicate that in &year-old children concepts about shops and concepts about fact ries constitute two independent systems. This is s shown both by the factor analysis and by the lack of generalization of the knowledge acquired through training. Thus, after training, some children are able to recognize that shopkeepers must take into account their profit when they set retail prices; nevertheless, the same children say that in factories prices are set arbitrarily, or simply on the basis of the beauty, utility, or size of the products regardless of the manufacturer’s profit and even of production costs. These results confirm the hypothesis suggested by most researchers in the field of children’s economic understanding, namely, that young children’s conceptions of economics consist of partsystems, eventually to be integrated with one another as children grow older (Jahoda 1979; Berti and Bombi 1981; Furth 1980; Leiser 1983). It is then necessary to examine older children in order to understand how these conceptions finally become integrated into a single, coherent body of knowledge, or - to say it with Abelson (1976) - how ‘episodic’ or ‘categorical’ scripts give rise to the more abstract and generalized knowledge of ‘hypothetical’ scripts. The lack of significant differences between the two trainings may be interpreted in two ways: (1) In the development of economic notions, disequilibrium is not so important as some researchers, relying on Piagetian theory, have hypothesized (Furth 1980; Jahoda 1979, 1981; Ng 1983). The function of disequilibrium in promoting cognitive development has also been discussed and reduced in importance by various authors (e.g. Brainerd 1978; Case 1985). (2) Our critical training was not effective in creating disequilibrium (and hence progress) because children’s misconceptions about profit were linked to a complex system of ideas which could not be undermined by training. The second hypothesis was supported by the qualitative analysis of children’s reactions during training, presented in detail elsewhere (Berti et al. 1986). Some children do not realize the identity of shopkeeper’s costs and income, being totally unable to compare the two quantities; others, while noting the identity of the two sums, say that the shopkeeper can get the extra money he needs from banks or charitable friends; other children think that shopkeepers can always ‘split the earnings’ between personal expenses and restocking without realizing that, by so doing, the sum to be split is progressively reduced. Thus, children’s ideas about buying and selling seem to be
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formed of various heterogeneous components, such as logical and arithmetical operations, information about other economic institutions such as banks, and general social knowledge pertaining to morality and interpersonal relationships. One possible extension of the present study is examination of the development of the elements (both correct and erroneous) by which children’s conceptions of shopkeeper’s profits are formed, and identification of pre-requisites for an understanding of profit. Another direction (Ajello et al. 1986), is that of creating more effective forms of training, both widening the areas of children’s knowledge taken into account, and changing the training procedures, i.e., relying more on discussion with peers than instruction by adults.
References Abelson, R.P., 1976. ‘Scripts processing in attitude formation and decision making’. In: J.S. Carroll and J.N. Payne (eds.), Cognition and social behavior. Hillsdale, NJ: Erlbaum. Ajello, A.M., A.S. Bombi, C. Pontecorvo and C. Zucchermaglio, in press. Teaching economics in the primary school: the concepts of work and profit. International Journal of Behavioral Develop ment. Berti, A.E. and AS. Bombi, 1981. I1 mondo economico nel bambino. Firenze: La Nuova Italia. Berti, A.E., AS. Bombi and R. De Beni, 1986. Acquiring economic notions: profit. International Journal of Behavioral Development 9, 1>29. Berti, A.E., A.S. Bombi and A. Lis, 1982. The child’s conceptions about means of production and their owner. European Journal of Social Psychology 12,221-239. Brainerd, C.J., 1978. Learning research and Piagetian theory’. In: L.S. Siegler (ed.), Alternatives to Piaget. New York: Academic Press. Case, B., 1985. Intellectual development. Birth to adulthood. New York: Academic Press. Furth, H.G., 1980. The world of grown-ups. New York: Elsevier. Hong Kwan T. and B.G. Stacey, 1981. The understanding of socio-economic concepts in Malaysian Chinese school children. Child Study Journal 11,33-49. Jahoda, G., 1979. The construction of economic reality by some Glaswegian children. European Journal of Social Psychology 9,115-127. Jahoda, G., 1981. The development of thinking about economic institution: the bank. Cahiers de Psychologie Cognitive 1, 55-73. Jahoda, G., 1983. European ‘lag’ in the development of an economic concept: a study in Zimbabwe. British Journal of Developmental Psychology 1,113-120. Jahoda, G. and A. Woerdenbagch, 1982. The development of ideas about an economic institution: a cross-national replication. British Journal of Social Psychology 21,337-338. Leiser, D., 1983. Children’s conceptions of economics. The constitution of a cognitive domain. Journal of Economic Psychology 4,297-3 17. Ng, S.H., 1983. Children’s ideas about the bank and shop profit: developmental stages and influence of cognitive contrasts and conflict. Journal of Economic Psychology 4,209-221. Piaget, J., 1926. La representation du monde chez l’enfant. Paris: Alcan.
Journal of Economic Psychology 7 (1986) 415424 North-Holland
THE DEVELOPMENT OF ECONOMIC NOTIONS: SINGLE SEQUENCE OR SEPARATE ACQUISITIONS?
*
Anna Emilia BERTI, Anna Silvia BOMB1 and Rossana DE BEN1 University of Padova, Italy
Received October 8,1985; accepted May 28, 1986
The conceptions on shops and factories of a group of 3rd-grade children were assessed by means of the Piagetian clinical method. Factorial analysis showed that children’s answers about the two economic institutions yielded two distinct factors. Children were then divided into three groups (one control and two experimental); children in the experimental groups were taught, by means of two different training procedures, how the shopkeeper can earn a profit. A post-test interview, one month later, showed that both experimental groups had progressed in the target notion; however, children did not generalize to the factory what they had learned about shops. According to these results, 3rd-graders’ thinking about economics consists of separate part-systems, which will eventually become integrated as children grow older.
Introduction
During the last 10 years an increasing number of studies have been carried out on children’s conceptions of social structures in general and, more specifically, on children’s conceptions of economics. Most of these studies have been conducted within a Piagetian framework, and have been concerned with identifying similarities as well as differences between the development of social knowledge and that of intellectual operations (Berti and Bombi 1981; Furth 1980; Jahoda 1979, 1981). This field is typically characterized by the search for stage-like sequences and, more recently, by an attempt to validate these sequences by means of crosscultural research (Hong Kwan and Stacey 1981; Jahoda and Woerden* This study was supported by a grant from M.P.I. (fondi 40%). Requests for reprints should be sent to A.E. Berti, Dipartimento di Psicologia dello Sviluppo e della Socializzazione, Universita di Padova, via Beato Pellegrino 26,35317 Padova, Italy. 0167-4870/86/%3.50~1986, Elsevier Science Publishers B.V. (North-Holland)
416
A.E. Bed
et al. / Economic socialization
bagch 1982; Jahoda 1983; Ng 1983). Two important issues that have not been greatly considered so far are how transition from one level to the next takes place, and whether the sequences through which different economic notions develop are related to one another. These two issues are interconnected: to the extent that developmental sequences regarding different notions are related, changes occurring in one may induce changes in the other. As far as the relations between sequences are concerned, a study on children’s conceptions about property and the functions of three means of production (factory, transportation and agriculture) has shown that children’s ideas about these means develop with differing rhythms through the same stage-like sequence (Berti et al. 1982). About how the transition from one level to the next occurs little is known. Jahoda (1979, 198 1) and Furth (1980) suggest that change takes place by means of conflict or ‘disequilibration’: becoming aware of the conflict between separate pieces of knowledge, children are led to restructure their conceptions. Both Jahoda (1979) and Furth (1980) found that some children changed their conceptions while being interviewed, and considered this an occurrence of the process of disequilibration. More recently, Ng (1983) has found that cognitive conflict produces a significant improvement in understanding the notion of bank profits in lo- to 13-year-old children. This article presents data from a larger study, conducted with two purposes: (1) to compare the effects of different training procedures on 8-year-old children’s understanding of shopkeepers’ profits; (2) to examine the relationships between children’s conceptions about shops and factories, and to check the degree to which changes in the former are generalized to the latter. Data pertaining to the first issue have been presented and discussed in detail elsewhere (Berti et al. 1986) and will be only briefly summarized here. We selected a group of children who believed that shopkeepers sell their goods at the same (or even lower) prices than they paid for them, and that the income earned in such a way is enough to restock the shop and maintain themselves. We then taught these children that shopkeepers increase retail prices with respect to wholesale prices; with some children we used a ‘critical’ procedure of training inspired by Piagetian method, with others a ‘tutorial’ one. Both trainings consisted of a game of buying and selling in which the child played the role of a customer, while two female experimenters impersonated a shopkeeper and her supplier. In critical training, the experimenter impersonating the shopkeeper sold her goods (ten handkerchiefs) at the same price she had paid for them. The
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et al. / Economic socialization
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child was then helped to realize that by so doing the shopkeeper did not make any profit, and to find out a way in which the shopkeepercould earn the money she needed both to supply her shop and to maintain herself. In tutorial training, the experimenter playing the shopkeeper’s role explained directly to the child that she would raise the retail price in order to earn enough money to make a living and restock the shop. While different in their procedural aspects, both trainings were designed to draw children’s attention to the following information: (1) to determine the amount of profit, the income and initial amount of money possessed by the shopkeeper must be compared; (2) the shopkeeper spends his money both on restocking the shop and making a living; (3) in order to make a profit, the shopkeeper must increase the retail price with respect to the price he paid. A partial analysis of pre- and post-test interviews, limited to children’s answers about the shop, showed that both trainings were effective in allowing children to improve their knowledge, slightly but significantly, about price determinations in shops. This means that children’s understanding of this particular economic notion develops both when they are given correct information and when they can discover inconsistencies in their judgments. A qualitative analysis of children’s behavior during critical training identified some difficulties children must overcome in order to understand the notion of profit (see Berti et al. 1986). In this paper we present data on to the second issue of the study, in which two different hypotheses may be advanced: Hypothesis 1. The shop and the factory are places where different actions occur; children generally come to know them in different circumstances and through different kinds of experiences: direct experience and observation in the case of the shop, verbal information in the case of the factory. As a consequence, knowledge about shops and factories should be organized into two groups of distinct script-like schemata, and improvement in one should not imply improvement in the other. Hypothesis 2. Factories and shops, although different, share one important characteristic: both sell goods in order to make a profit, which is the result of a difference between expenses and proceeds. If children’s knowledge is not organized into different schemata for different kinds of businesses, but into more abstract schemata such as ‘buying and selling’, ‘price determination’ and ‘profit’, training about shopkeepers’ profit should be effective for factory profits too.
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Both these hypotheses might be true, each describing what happens at different age levels. In our study we examined 8-9-year-old children whose conceptions have been described as ‘part-systems’, midway between fragmentary and playful images characterizing the first levels of economic thinking and the systemic understanding of older children (Jahoda 1979; Furth 1980; Berti and Bombi 1981; Leiser 1983). We expected that for these children the factory and the shop would constitute two of such ‘part-systems’ not yet coordinated by means of more abstract schemata (hypothesis 1). In order to test both hypotheses, we analyzed the structure of children’s ideas about factories and shops prior to training. Then we checked whether the notion of shopkeepers’ profit, acquired during training, was generalized to factory profit in the post-test. Method Procedure and subjects The research design provided, first of all, for measurement of the children’s initial level by means of a pre-test, which consisted of a wide semi-structured interview about small-scale buying and selling and about factories. We interviewed 96 third-grade middle-class children (average age 8;3) at two schools in Padua (Italy). The concept of profit had not yet been taught in their classes. Children who already recognized that shopkeepers must raise retail prices in order to make a profit (n = 29) were discarded from the study together with those considered too backward to undergo the training, i.e., those who did not know that shopkeepers must buy the goods they sell (n = 5) and those who believed that shopkeepers did not need to make a living from their work (n = 2). The remaining children (n = 60) were randomly assigned to three groups labeled A, B and C. Each child from groups A and B was given the above-described training (‘critical’ for group A and ‘tutorial’ for group B). The interview was repeated after an interval of one month (post-test). Group-C children were given only the pre- and post-tests. Since some children were absent for the post-test, groups A, B and C were reduced to 16 children each (approximately 8 boys and 8 girls). The children were examined one at a time in a room made available by the school. Interviews were conducted using linguistic expressions similar to those used by children and going deeply into the answers in the way suggested by Piaget (1926). All answers were tape-recorded and transcribed.
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Interview contents and scoring The interview dealt with 12 different topics, which were separately scored. Tables 1 and 2 present the main questions about each topic, together with the scores attributed to the various answer levels. These Table 1 Small-scale buying and selling: interview topics, responses obtained and scoring. (1) How do shopkeepers determine the prices at which they sell their goodr? -They decide arbitrarily, just ‘thinking about it’ or ‘knowing it’, or follow arbitrary decisions by authorities, such as local councils, governments or magistrates -They consider ‘quality’ of goods (beauty, utility, size, etc.) and tix higher prices for better goods -They base decisions on prices paid for goods, leaving retail prices equal to wholesale prices, or they can lower or even raise them, but for reasons having nothing to do with profit -They add a quota to wholesale prices, since this is the only way they can earn from the transaction
1 2
3 4
(2) Whar do shopkeepers do with money acquired through selling? - They maintain themselves or restock their shops -They maintain themselves and restock their shops (answer given after interviewer’s prompt) -They maintain themselves and restock their shops (spontaneous answer)
2 3
(3) How do shopkeepers obtain money to maintain themselves? -They get it from sources external to their business (e.g., relatives, banks, govemment) -They earn it by selling their goods
1 2
(4) Where do the shop’s goodr come from? -The shopkeepers themselves make them -They buy them from one another -They buy them from producer’s, directly or through go-betweens
1 2 3
(5) How do shopkeepers obtain money to buy the goorLF they will sell? - They don’t have to pay for them -They pay with money from people having nothing to do with the shop -They pay with their earnings
1 2 3
(6) How do shopkeepers manage to earn? -They can ‘profit’ (i.e., provide for both their personal needs and shop restocking) even selling at wholesale prices or lower prices -They only ‘earn a little’ when they do not increase prices, or they can manage because of large numbers of customers - They mostly sell at prices exceeding wholesale prices (answer given with experimenter’s help) - They usually base on amount paid for goods, adding sufficient mark-up to provide for both personal needs and restocking
1
1 2 3 4
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Table 2 The factory: interview topics, responses obtained and scoring. (7) What function do factories serve? - They produce things
-They produce things and sell them
1 2
(8) Who pays the workers? -Someone external to the factory (council, state or banks) who gives money either directly to workers, or to owner who then pays them - The person who buys the products (shopkeeper or wholesaler) -The factory owner, with money obtained from sales
1 2 3
(9) To whom do the factories’ customers give their money? - To person transporting the goods (e.g., truck driver) who keeps it -To the workers - Directly to factory owner -To owner through an intermediary
1 2 3 4
(10) Who decides prices of goods sold by the factories? - Someone other than the producer (e.g., council, buyer, truck driver) - Producer (owner or workers)
1 2
(11) How is price of products determined? - Any price is chosen, or government decisions are followed - ‘Quality’ of product is considered -One or more of the production costs are taken into account -A quota is added to production costs, in order to make profits
1 2 3 4
(12) How - On - On - On
1 2 3
are the earnings spent?
personal expenses personal expenses, plus one of the production costs personal expenses plus two or more production costs
levels were determined by examining a number of transcripts and taking account of the developmental sequences of children’s ideas for each topic, as shown by previous cross-sectional studies (Berti and Bombi 198 1). The answers to each topic were then ordered according to their increasing complexity and/or correctness. Each interview transcript was scored by two independent judges, who agreed in 90% of cases. Discrepancies between their scores were never more than one level apart and were resolved by discussion. Statistical analyses To reveal the possible relationship between children’s ideas about buying and selling in shops and about industrial production, we first
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carried out a varimax rotated factor analysis. On the 12 scores obtained in the pre-test by all the children from groups A, B and C, 4 factors were extracted, for 60.3% of the total variance. To check the generflization of the trained notions, we compared the pre- and post-test scores on price determination in shops (table 1, topic 1) and factories (table 2, topic 11). A 3-way ANOVA (3 x 2 x 2) with independent measures for the first factor (groups A, B and C) and repeated measures for the other two factors (pre- and post-test and considered concepts) was carried out. Results
Factor analysis revealed the existence of two interpretable factors, the first with high loadings of items relating to the factory, the second with high loadings on three of the items relating to small-scale buying and selling (tables 3 and 4). These two groups of items therefore seem to be separate, at least in the pre-test. The ANOVA showed the following significant effects: (1) a main effect of pre- and post-test measures (F(1,45) = 16.758, p < 0.001); (2) an interaction between pre- and post-test measures and the two considered concepts, i.e., price determination in shops (s) or factories (f) (F(1,45) = 17.74,p < 0.001); (3) an interaction between groups (A, B and C), pre- and postTable 3 Items comprising first factor and relative saturations. Topic Topic Topic Topic Topic
7: 9: 10: 11: 12:
What function does the factory serve? To whom do the factory’s customers give their money? Who decides the price of goods sold by the factory? How does the person in charge of it determine the prices of products? How are earnings spent?
0.70 0.65 0.67 0.47 0.59
Table 4 Items comprising second factor and relative saturations. Topic 2: What do shopkeepers do with money acquired by selling? Topic 5: How do shopkeepers obtain money to buy goods they sell? Topic 6: How do shopkeepers manage to earn?
0.36 0.81 0.35
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2.4. .
e----4 c.-.d
GA GB GC
2.2.
2.0-
1.6-
1.6-
1.4.
1.2 PRE TEST
POST TEST
Fig. 1. Mean scores of groups A, B and C on the questions on price determination in shops and factories. Note: s = shops, f = factories.
test measures and the two above-mentioned concepts (s and f) (F(2,45) = 4.105,~ < 0.022). Post-hoc analysis, conducted using the Neumann-Keuls method, showed that groups do not differ in their degree of knowledge about the two concepts in the pre-test; on the post-test groups A and B appear significantly superior to the control group only in the trained concept, i.e., how shopkeepers determine retail prices in order to make a profit (see fig. 1). Only 6 children in groups A and B made progress in this area and arrived at the correct notion (level 4); 8 children reached level 3 and 4 reached level 2. Instead, with regard to factory prices, only one child progressed, passing from level 3 to level 4. These results support hypothesis 1 (see above). They indicate that although training on how shopkeepers determine prices affects children’s conceptions in that specific field, it does not allow them to generalize these conceptions to another, analogous, case.
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Discussion and conclusions Results indicate that in &year-old children concepts about shops and concepts about fact ries constitute two independent systems. This is s shown both by the factor analysis and by the lack of generalization of the knowledge acquired through training. Thus, after training, some children are able to recognize that shopkeepers must take into account their profit when they set retail prices; nevertheless, the same children say that in factories prices are set arbitrarily, or simply on the basis of the beauty, utility, or size of the products regardless of the manufacturer’s profit and even of production costs. These results confirm the hypothesis suggested by most researchers in the field of children’s economic understanding, namely, that young children’s conceptions of economics consist of partsystems, eventually to be integrated with one another as children grow older (Jahoda 1979; Berti and Bombi 1981; Furth 1980; Leiser 1983). It is then necessary to examine older children in order to understand how these conceptions finally become integrated into a single, coherent body of knowledge, or - to say it with Abelson (1976) - how ‘episodic’ or ‘categorical’ scripts give rise to the more abstract and generalized knowledge of ‘hypothetical’ scripts. The lack of significant differences between the two trainings may be interpreted in two ways: (1) In the development of economic notions, disequilibrium is not so important as some researchers, relying on Piagetian theory, have hypothesized (Furth 1980; Jahoda 1979, 1981; Ng 1983). The function of disequilibrium in promoting cognitive development has also been discussed and reduced in importance by various authors (e.g. Brainerd 1978; Case 1985). (2) Our critical training was not effective in creating disequilibrium (and hence progress) because children’s misconceptions about profit were linked to a complex system of ideas which could not be undermined by training. The second hypothesis was supported by the qualitative analysis of children’s reactions during training, presented in detail elsewhere (Berti et al. 1986). Some children do not realize the identity of shopkeeper’s costs and income, being totally unable to compare the two quantities; others, while noting the identity of the two sums, say that the shopkeeper can get the extra money he needs from banks or charitable friends; other children think that shopkeepers can always ‘split the earnings’ between personal expenses and restocking without realizing that, by so doing, the sum to be split is progressively reduced. Thus, children’s ideas about buying and selling seem to be
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formed of various heterogeneous components, such as logical and arithmetical operations, information about other economic institutions such as banks, and general social knowledge pertaining to morality and interpersonal relationships. One possible extension of the present study is examination of the development of the elements (both correct and erroneous) by which children’s conceptions of shopkeeper’s profits are formed, and identification of pre-requisites for an understanding of profit. Another direction (Ajello et al. 1986), is that of creating more effective forms of training, both widening the areas of children’s knowledge taken into account, and changing the training procedures, i.e., relying more on discussion with peers than instruction by adults.
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