Investigation of products liability attitudes and opinions: a consumer perspective.
The products liability issue has been a subject of considerable debate and examination over the last 200 years (Adams and Bennett-Alexander 1985; Spacone 1985). This is not surprising, as the stakes for businesses are obvious and can even threaten the entire existence of an industry (Darden et al. 1991; Downs and Behrman 1986; Mowen 1983; Settle and Spigelmyer 1984). Complicating com·pli·cate
tr. & intr.v. com·pli·cat·ed, com·pli·cat·ing, com·pli·cates
1. To make or become complex or perplexing.
2. To twist or become twisted together.
1. matters further is the ability of the legal system to hold producers and all other parties involved in marketing products and services accountable in liability litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.
When a person begins a civil lawsuit, the person enters into a process called litigation. (e.g., Moning v. Alfono 1977). Thus, a firm's exposure to products liability can be difficult to assess. One experienced business executive reflects on the products liability issue:
When I began my business career 30 years ago, the liability of manufacturers and distributors for injuries suffered by a product user was ... easily understood; businesses could be held responsible if their actions or conduct were negligent negligent adj., adv. careless in not fulfilling responsibility. (See: negligence) . During the past three decades, however, product liability law has changed dramatically, creating confusion among manufacturers and distributors as to what exactly constitutes liability ... |t^hese changes have produced a tremendous expansion in the scope of product-related injuries for which manufacturers and distributors are now held accountable (Malott 1983, 67).
Clearly, as the standard for determination of manufacturer liability has changed from negligence to strict liability, related costs to business have increased substantially. While it could be argued that this was the intention of the enterprise liability theories guiding these changes (Priest 1985), it is hardly surprising that business leaders have expressed some confusion and disdain for the shift in common law governing product-related injuries. In an attempt to better understand views of policymakers and business executives, Bush and Hair (1980) conducted a survey of attitudes with respect to liability and safety. They conclude that opinions of these groups differ substantially, leading to conflict and confusion regarding the direction firms should take in establishing meaningful policies to deal with product and service liability.
Likewise, the views of the legal system have been expressed. For example, Morgan (1982, 1986, 1988a, 1989) and Morgan and Avrunin (1982) have provided several reviews and interpretations of products liability suits. Through these interpretations, they attempt to help interested parties understand relevant trends in common law which in large part shape public policy in the area.
Without question, the changes in public policy and products liability legal doctrine Legal doctrine is a framework, set of rules, procedural steps, or test, often established through precedent in the common law, through which judgments can be determined in a given legal case. are intended to reduce the likelihood of a product-related injury and--if an accident does occur--assure just compensation for the injured in·jure
tr.v. in·jured, in·jur·ing, in·jures
1. To cause physical harm to; hurt.
2. To cause damage to; impair.
3. consumer. However, while the studies cited investigate products liability opinions as voiced by business executives and the legal system, relatively few studies investigate similar opinions, attitudes, and predispositions of general consumers and product users. Not only have academic researchers neglected the consumers' perspective, but the products liability legal system appears to ignore the sentiments of the consumers it seeks to protect as well. Priest makes this point explicitly:
Every court today affirms that the goal of modern products liability law is to protect consumers, but no court today attempts to seriously identify the needs, interests, or preferences of the consumers it hopes to reach. The now-extensive and far-reaching corpus of modern products liability law has been and continues to be defined without any attention at all to specific characteristics of consumers or of consumer product markets (1988, 771).
The question to be answered is "Do consumers pervasively express opinions consistent with those expressed by the judicial system?" This seems to be an important question considering the implications for product safety standards Safety standards are standards designed to ensure the safety of products, activities or processes, etc. They may be advisory or compulsory and are normally laid down by an advisory or regulatory body that may be either voluntary or statutory. , products liability legal doctrine, and, ultimately, consumers themselves.
At the very least, the views of consumers should be useful in managerial decision making. For example, Barksdale and Darden (1971) found that top business executives are quite concerned with consumer views and expectations in designing products and services. They report that 90 percent of executives chosen from a sample of "Fortune's Directory of the 500 Largest Corporations" strongly believe that opinions of consumers are necessary to design products which precisely meet needs and wants of consumers. Thus concern about the macro-environment, corporate image, and long-run financial strength suggests that managers need to ascertain objective consumer views on all dimensions of product and service liability concerns.
The purpose of this paper is to report the results of a survey examining consumer attitudes toward products liability issues. More specifically, this study examines variability in opinion across consumers on several crucial liability issues derived from recent products liability theory. Further, a demographic analysis Demographic analysis uses administrative records to develop an independent estimate of the population . Demographic analysis estimates are often considered a reliable standard for judging the accuracy of the census information gathered at any time. is conducted to explore possible sources of variability in opinion. Finally, an analysis is reported to see if these attitudes toward liability extend to related issues as well. As a study of consumers' attitudes and opinions, this paper establishes benchmarks for use by future researchers in the area of product and service liability. The information derived from the study can help business people and policymakers make more informed decisions with respect to questions of product safety and liability.
BACKGROUND AND ISSUES
Assessing Consumer Liability Attitudes
The wide variance of opinion voiced in the products liability literature (compare Swartz (1986) and Friedman (1986) for an overview), as well as the amount of debate expressed in legislatures and Congress (e.g., Settle and Spigelmyer 1984; Shalowitz 1987) may be indicative of a large variability in opinion among the general public as well. If so, does the present liability litigation system accurately reflect the opinion of most consumers? In other words Adv. 1. in other words - otherwise stated; "in other words, we are broke"
put differently , do consumers generally agree or disagree with Verb 1. disagree with - not be very easily digestible; "Spicy food disagrees with some people"
hurt - give trouble or pain to; "This exercise will hurt your back" products liability legal tenets? For example, consumer opinions on difficult issues like risk-utility trade-offs are likely to vary with certain consumer characteristics and situational influences (Mowen 1983).
One avenue where consumers can express their opinions regarding liability issues is when they serve as a juror juror n. any person who actually serves on a jury. Lists of potential jurors are chosen from various sources such as registered voters, automobile registration or telephone directories. . However, inferring consumer desires from jury opinions may not give a complete picture of consumer attitudes. For instance, Friedman (1986) describes the diametric di·a·met·ri·cal also di·a·met·ric
1. Of, relating to, or along a diameter.
2. Exactly opposite; contrary.
di nature of interpreting consumers' product safety desires. On one hand, consumers desire a wide variety of products, many on the leading edge of technology, at affordable prices. On the other hand, consumers desire absolute safety for products they might purchase. However, when a consumer becomes a juror, he/she may only express the latter opinion. Similarly, Gerner argues that relying on analysis of court cases does not "provide enough information to reveal reliably the impact of either producer or consumer liability on product safety" (1988, 45). In an empirical study, it has been shown that consumers' product safety opinions are sometimes altered by the emotional nature of a trial setting (Darden et al. 1991). Therefore, to accurately access consumer attitudes regarding product safety and liability issues, we must look beyond liability court cases.
Friedman (1986) argues that the manner in which the legal system has dealt with the diametric interpretation of consumers' product safety desires has been to adopt what he calls a "consumerist" orientation. While this belief is not pervasive among legal scholars--Swartz (1986) provides an emotional rebuttal--Spacone (1985) would seem to agree. He argues that products liability plaintiffs are often disproportionately compensated through the will of the court to protect the consumer. Others (e.g., Dworkin and Sheffet 1985) feel that recent legal trends are continuing to expand marketer liability to a point approaching "absolute liability." It could even be argued that the drafters of the Second Restatement Restatement
A revision in a company's earlier financial statements.
The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of Torts Section 402A, a document that precipitated the expansion of manufacturer liability, could not have anticipated and may not have intended the dramatic changes in products liability litigation that have taken place since (Gerner 1988; Priest 1988).
While there are clearly many factors that guide changes in societal mechanisms for providing relief for consumers suffering from product-related injuries, Friedman (1986) feels that three characteristics of the post-restatement products liability legal environment are largely responsible for this orientation: (1) the emergence of strict liability; (2) deep-pocket liability awards; and (3) liability trials determined by juries (as opposed to judges). Other authors express similar reasoning (e.g., Dworkin and Sheffet 1985; Spacone 1985). Each of these three characteristics are examined below. Following this discussion, a study examining consumer opinions concerning each of these characteristics is described.
Under strict liability, as opposed to earlier legal doctrines The following is a list of legal concepts and principles, most of which apply under common law jurisdictions.
Several theories exist to explain the adoption of a strict liability standard. Priest (1985) argues that strict liability is the result of the courts struggling to deal with the costs to society due to product-related injuries. In reviewing the history of strict liability, he points out that it results, in part, from the idea that consumers are powerless and in need of protection in the marketplace. After President Kennedy proposed the Consumer Bill of Rights in 1962, noted as the start of the consumerist movement (Engel, Blackwell, and Miniard 1990), a trend toward strict liability and away from negligence and privity A close, direct, or successive relationship; having a mutual interest or right.
Privity refers to a connection or bond between parties to a particular transaction. Privity of contract is the relationship that exists between two or more parties to an agreement. flourished (Gerner 1988; McKean 1970). Considering the timing of the adoption of strict liability standards by many jurisdictions, it has been argued that the consumerist movement was responsible for its acceptance (Rados 1969). Normative nor·ma·tive
Of, relating to, or prescribing a norm or standard: normative grammar.
nor effects theory could be used to explain why these two events may have coincided (Munger 1988). According to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. normative effects theory, the law should reflect the solidarity of opinion among a social community (Durkheim 1947). Thus, the emergence of strict liability doctrine could be interpreted as reflecting a pervasive opinion among Americans that business should bear costs of product-related injuries regardless of privity, negligence, or consumer expectations.
Two landmark cases illustrating strict liability applications are Greenman v. Yuba Power Products, Inc. (1963) and Henningsen v. Bloomfield Motors In Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69 (N.J. 1960), the New Jersey Supreme Court held that an automobile manufacturer's attempt to use an express warranty which disclaimed an implied warranty of merchantability was invalid. , Inc. (1960). "The powerful arguments of the respective opinions |expressed in these two cases^ provided the grounds for subsequent adoption of the strict liability standard in the remaining U.S. jurisdictions" (Priest 1985, 507). As strict liability continues as an important legal philosophy in products liability cases today (Morgan 1988b), it would be interesting to examine consumer opinion regarding it.
According to Friedman, there exists a deep-pocket sentiment in products liability actions that can be interpreted as "those who can most afford to pay should do so willingly" (1986, 6). The result is to vertically extend strict liability to each member of a distribution channel, including franchisers and product endorsers, and further to make exposure to liability extremely difficult to assess (Manley 1987). Howard (1977) illustrates how damages can be sought from multiple channel members by describing events from Moning v. Alfono (1977). In Moning an injury was incurred as the result of a child's use of a slingshot (networking, business, tool, product, protocol) Slingshot - CSK Software's real time financial server for the Internet.
Slingshot allows the delivery of real time market data across the Internet and private intranets quickly, cheaply and securely. ruled to be neither defective nor dangerous. The retailer, wholesaler, and manufacturer were all named as defendants and held liable without regard to negligence or privity (Howard 1977). Thus, plaintiffs are free to seek awards from defendants based on their ability to pay rather than on their degree of responsibility for a product-related injury.
The philosophy of market share liability continues this trend, extending responsibility horizontally (Boedecker and Morgan 1986). It provides for award payments from each firm in an industry in proportion to their sales when the identity of the producer of a product causing an injury is difficult to determine (see Sindell v. Abbott Laboratories 1980). As with strict liability, a major force driving these new legal doctrines is the concept of risk-spreading or loss-distribution (Glasscock 1987). This philosophy is based on the premise that firms in a given industry are better able to bear costs associated with product/service-related injuries than are victims (Sheffet 1983). Under a loss-distribution orientation, the court is free to spread the cost of injury in an effort to ensure full payment to successful plaintiffs (see Lechuga v. Montgomery 1970).
Trial by jury
The final characteristic listed by Friedman (1986) describes a court system dominated by jury trials. This sentiment reflects an opinion that in addition to the legal philosophies discussed above, the mechanics of the legal system sometimes contribute problems. Two related factors contributing to these problems are discussed.
First, judges in liability cases "conceive their roles as mere conduits to carry every case to the jury, where other consumers are sitting as jurors |and^ will decide the case" (Friedman 1986, 7). Further, courts have been known to adopt multivariable standards which increase the likelihood that a trial will reach a jury and make it more likely that a verdict will be upheld upon appeal (Priest 1988). In addition, courts have ruled that product usage is within the "common experience" so issues are often passed to the jury with little explanation (see Campbell v. General Motors Corporation 1982). Magnifying the effects of juries on the entire products liability situation is the likelihood that jury awards provide benchmarks for out-of-court settlements (Gerner 1988). Because it is generally believed that judges are more objective and less influenced by their sympathies in litigating products liability cases than is a jury of consumers (Van Koppen and Ten Kate The term or phrase Ten Kate can refer to:
Second, jury trials often result in an award which may unreasonably favor the plaintiff (Bacas 1986b). Mowen (1983) describes how "source effects" such as the socioeconomic status of the defendant, which may be technically irrelevant, often contribute significantly to a jury decision. Spacone (1985), voicing a strong and controversial opinion, has argued that the propensity for products liability suits to be settled by a jury allows for a form of "collectivism collectivism
Any of several types of social organization that ascribe central importance to the groups to which individuals belong (e.g., state, nation, ethnic group, or social class). It may be contrasted with individualism. " to be practiced. That is, jurors may give high awards in case they are ever in the position of a products liability plaintiff themselves. Several liability reformers have suggested award limits in an effort to restore balance to liability awards (Huber 1987; Kelley 1986). So far, these reforms have been largely unsuccessful.
Do consumers, in general, possess a sentiment capable of influencing products liability rulings and fueling a "Robin Hood Robin Hood, legendary hero of 12th-century England who robbed the rich to help the poor. Chivalrous, manly, fair, and always ready for a joke, Robin Hood reflected many of the ideals of the English yeoman. Syndrome" (Friedman 1986)? Anecdotal evidence anecdotal evidence,
n information obtained from personal accounts, examples, and observations. Usually not considered scientifically valid but may indicate areas for further investigation and research. appears to support this idea. For example, recent changes in the European Economic Community and the Council of Ministers Directive on liability for products has moved the majority of European countries toward strict liability in tort law A body of rights, obligations, and remedies that is applied by courts in civil proceedings to provide relief for persons who have suffered harm from the wrongful acts of others. (Greer 1992). However, there is less consumerist sentiment in Europe (Greer 1988) compared to the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and lower products liability costs to European businesses ("Federal Liability Standards: ..." 1988). Additionally, a majority of European countries do not use contingency fee contingency fee Law & medicine An attorney fee based on a percentage of the money recovered in a lawsuit systems, nor do they use juries to decide products liability cases. Given this evidence, the variability in opinion among business people and policymakers discussed earlier and the importance of the three products liability characteristics delineated de·lin·e·ate
tr.v. de·lin·e·at·ed, de·lin·e·at·ing, de·lin·e·ates
1. To draw or trace the outline of; sketch out.
2. To represent pictorially; depict.
3. by Friedman (1986), some interesting research questions regarding consumers' products liability opinions include
(1) Do consumers, in general, agree with the changes in the products liability legal environment as captured by the three characteristics (strict liability, deep-pocket awards, and an inclination toward jury trials in products liability cases) Friedman and others feel are significant?
(2) Does substantial variability exist among consumers with respect to their opinions about these three characteristics? Further, do discrete segments of consumers exist based on their attitudes toward these characteristics?
Should segments be found, it would be useful to describe them socioeconomically (Engel, Blackwell, and Miniard 1990). Personal characteristics including income, occupation, and education of jurors have been found to relate to the levels of sympathy and damages awarded to a products liability plaintiff (Darden et al. 1991). Similarly, previous studies have shown that consumer attitudes toward product safety vary with demographic variables such as income and education (Federal Trade Commission 1983). Thus, it is reasonable to assume that these variables influence consumer attitudes toward the three characteristics described as well. In addition, life experiences are reflected in socioeconomic characteristics of consumers and are likely to influence their attitudes on products liability issues. For instance, professional or white-collar workers white-collar workers, broad occupational grouping of workers engaged in nonmanual labor; frequently contrasted with blue-collar (manual) employees. American in origin, the term has close analogues in other industrial countries. are more likely to identify with problems of management and be less sympathetic toward liability legislation. Conversely con·verse 1
intr.v. con·versed, con·vers·ing, con·vers·es
1. To engage in a spoken exchange of thoughts, ideas, or feelings; talk. See Synonyms at speak.
2. , people with non-business backgrounds may not realize the potential consequences associated with large liability costs. Thus, just as income, education, and occupation have been pervasively useful in segmenting consumers in other situations (Engel, Blackwell, and Miniard 1990), it is expected that they could be useful in segmenting consumers based on their attitudes toward basic products liability issues. Therefore, it is hypothesized that products liability opinions are, at least in part, determined by political and socioeconomic characteristics of individuals:
(3) If segments are found, can they be described socioeconomically by profiling the characteristics of each segment?
Extension to Related Issues
If consumers can be segmented based on their attitudes toward the three products liability characteristics described as leading to a consumerist orientation by Friedman (1986) and Spacone (1985), it is likely that segment membership would influence consumer opinions on other issues as well. To explore other products liability issues which may be relevant to consumers, some focus group interviews were conducted. Members of the focus groups included lawyers, business executives, and a number of typical consumers selected from the university community. Focus group participants were queried concerning their feelings and attitudes with regard to product safety and the products liability jurisprudence jurisprudence (jr'ĭsprd`əns), study of the nature and the origin and development of law. system. Responses elicited in these interviews were categorized cat·e·go·rize
tr.v. cat·e·go·rized, cat·e·go·riz·ing, cat·e·go·riz·es
To put into a category or categories; classify.
cat in an attempt to delineate salient issues uncovered through open discussion. The areas expressed most frequently centered on (1) the role that lawyers play in the products liability environment, (2) legislative aspects such as limits on the amount of damages awarded to products liability plaintiffs, and (3) the tradeoff between product safety and the availability of more and cheaper products.(1) These three topics are considered relevant for further analysis, raising the following research question:
(4) Do the attitudes of any discrete segments of consumers based on Friedman's three characteristics extend to other liability issues as well?
The remainder of this paper describes a study that (1) assesses the variability of consumer attitudes toward general liability issues, (2) examines characteristics of a sample of consumers to determine if individual differences in their liability attitudes can be accounted for, and (3) investigates three additional liability issues and their relationship with the Robin Hood Syndrome. Each of the latter relationships will be tested while controlling for consumer socioeconomic characteristics and political orientation Noun 1. political orientation - an orientation that characterizes the thinking of a group or nation
ideology, political theory
orientation - an integrated set of attitudes and beliefs .
A self-reported inventory of 46 Likert items reflecting the products liability issues discussed above was generated and submitted to a pre-test sample of 317 head of household respondents similar in profile to those used in later analyses. A factor analysis of these responses was conducted to pretest pre·test
a. A preliminary test administered to determine a student's baseline knowledge or preparedness for an educational experience or course of study.
b. A test taken for practice.
2. hypothesized scales (Churchill 1979; Smith 1974). Based on these results, a refined version of the questionnaire was developed and submitted to a new sample.
The resulting survey instrument required respondents to indicate agreement with 29 items representing their opinions about the six products liability factors described earlier using a five-point Likert scale Likert scale A subjective scoring system that allows a person being surveyed to quantify likes and preferences on a 5-point scale, with 1 being the least important, relevant, interesting, most ho-hum, or other, and 5 being most excellent, yeehah important, etc , ranging from "Strongly Disagree" to "Strongly Agree." The six underlying factors are hypothesized as representing each of the three characteristics outlined by Friedman (strict liability, deep pocket, and juries over judges) and the three salient issues uncovered in qualitative research Qualitative research
Traditional analysis of firm-specific prospects for future earnings. It may be based on data collected by the analysts, there is no formal quantitative framework used to generate projections. (the role of lawyers, placing limits on liability awards, and stressing product safety at any cost). This refined version of the self-administered questionnaire was then submitted to a sample of consumers described below. Subject responses were factor analyzed and rotated rotated
turned around; pivoted.
see rotated tibia. to simple structure using the varimax procedure, retaining only those factors with eigenvalues eigenvalues
statistical term meaning latent root. greater than unity. Table 1 contains results of this analysis using a sample item, its factor loading, and a measure of each scale's overall reliability. Each of the six scales included both positively and negatively phrased items. As can be seen, the scales display acceptable levels of reliability ranging from a low of .55 to a high of .82 and validity as indicated by TABULAR DATA OMITTED the pattern of factor loadings which range from .53 to .88. A scale measuring political orientation (used later) is also contained in Table 1. In addition, respondent information including educational status, occupation, and income was collected.
The respondents in this study are from a consumer panel in the southwestern United States. Although the panel is from a single state, consumers from this panel have consistently been shown to be demographically and psychographically representative of this and other southwestern states to which comparisons have been made (Panel Facts 1982, 1987). The state is divided into eight planning regions which were used as strata. Five hundred potential respondents were chosen using a randomized ran·dom·ize
tr.v. ran·dom·ized, ran·dom·iz·ing, ran·dom·iz·es
To make random in arrangement, especially in order to control the variables in an experiment. , proportionate pro·por·tion·ate
Being in due proportion; proportional.
tr.v. pro·por·tion·at·ed, pro·por·tion·at·ing, pro·por·tion·ates
To make proportionate. stratified sampling Noun 1. stratified sampling - the population is divided into subpopulations (strata) and random samples are taken of each stratum
proportional sampling, representative sampling
sampling - (statistics) the selection of a suitable sample for study plan. Four hundred and fifty-three usable questionnaires were returned, yielding a 91 percent household response rate. Late and early responders provided similar response patterns, supporting the view that the sample is representative of the total panel. Panel members were provided with nonmonetary incentives (e.g., discount coupons, vouchers for products, product samples, etc.) to increase participation.
Descriptive Statistics descriptive statistics
In an effort to better understand the general opinion of consumers with respect to current trends in products liability legislation, an initial analysis was conducted to ascertain both the mean level of response and proportion of respondents who disagree, are neutral, or agree with sentiments underlying each of the six factors described above. To obtain these results, a respondent's total score on each composite liability attitude scale was normalized back to the original scale values of its indicators (five-point agreement). Thus, a score of "3" (midlevel mid·lev·el
The middle stage or level, as in a series, course of action, or career. ) on a factor would be indicative of a "neutral" opinion. For simplicity, those respondents with scores of either "1" or "2" are classified as disagreeing and those with scores of either "4" or "5" are counted as agreeing.
Table 2 presents results of this analysis. Based on these results, consumers in general appear to disagree most with "deep-pocket" awards. Not only is the mean on this issue well below the scale mid-point (2.35), but 68.9 percent of all respondents expressed disagreement with this characteristic compared to only 3.9 percent who voiced agreement. Respondents also tend to disagree with strict liability as indicated by a low overall mean (2.80) and a relatively high percentage of opposition (35.8). In contrast, high levels of agreement are observed on two factors. First, respondents expressed a high level of agreement (3.50) that lawyers are partially responsible for high liability costs. Only eight percent of this sample expressed a dissenting opinion dissenting opinion n. (See: dissent) on this factor. Second, consumers expressed a high level of agreement (3.64) that marketers should stress safety in their offerings regardless of cost. Well over half of all subjects (65.9 percent) expressed agreement on this factor. The general sentiment of consumers appears to be relatively neutral with respect to the remaining two attitudes: juries over judges and award limits.
While these results are interesting and useful in assessing general levels of sentiment in consumer opinion, they also indicate some degree of dispersion dispersion, in chemistry
dispersion, in chemistry, mixture in which fine particles of one substance are scattered throughout another substance. A dispersion is classed as a suspension, colloid, or solution. among respondent attitudes. The following analysis addresses this possibility. More precisely, the extent and nature of variability in opinions are investigated among specific segments of consumers.
A preliminary analysis was conducted to test for the existence of clusters in the data. A hierarchical duster analysis, using Ward's algorithm, was conducted and used to plot the percentage of variance explained by extracting varying numbers of clusters. This plot displayed an "elbow" in the amount of variance explained by a four-group solution suggesting it to be an appropriate representation of the data (Ward 1963). In addition, Arnold's (1979) test for clusters was applied and demonstrates that the data are neither unimodally nor uniformly distributed (i.e., clusters do exist).
TABLE 2 Overall Consumer Sentiment Regarding Products Liability Issues Overall Respondents Who Attitude Toward Mean Disagree Are Neutral Agree (percent) Deep-Pocket Awards 2.35 68.9 27.2 3.9 Strict Liability 2.80 35.8 47.9 16.3 Juries Over Judges 3.00 30.4 38.9 30.6 Award Limits 3.04 29.5 49.7 20.8 Lawyers Are to Blame 3.50 8.0 49.2 42.8 Safety at Any Cost 3.64 3.8 30.3 65.9
This initial solution was provided as input to an iterative it·er·a·tive
1. Characterized by or involving repetition, recurrence, reiteration, or repetitiousness.
2. Grammar Frequentative.
Noun 1. procedure, K-Means (MacQueen 1967), to derive final group memberships. Results of this analysis are shown in Table 3. The pseudo-F statistic statistic,
n a value or number that describes a series of quantitative observations or measures; a value calculated from a sample.
a numerical value calculated from a number of observations in order to summarize them. and cubic clustering criterion provide further support for a four-group solution (Johnson 1972; Sarle 1983). Thus, there does appear to be evidence of clusters, or segments, of consumers based on their products liability attitudes. Because multiple clusters exist, it can be concluded that there is variability in respondent opinions concerning strict liability, deep-pocket judgments, and juries over judges.
The standardized centroid centroid
In geometry, the centre of mass of a two-dimensional figure or three-dimensional solid. Thus the centroid of a two-dimensional figure represents the point at which it could be balanced if it were cut out of, for example, sheet metal. of each cluster can be used to describe each group relative to the others. Group 1, comprising 16 percent of respondents, is characterized by relatively high levels TABULAR DATA OMITTED (1.08) of agreement with statements reflecting that juries, rather than judges, should render decisions in products liability trials. Group 1 respondents also display the highest level of agreement with statements supporting the legal doctrine of strict liability (0.90). Along these two liability environment characteristics, Group 1 respondents are quite distinct in terms of their support for what some have called a "consumerist" orientation in products liability policy. However, these respondents appear close to average, although displaying the second highest level of agreement (-0.16), toward deep-pocket awards.
Group 2 is best characterized by its relatively extreme level of disagreement with statements supporting the legal philosophy of strict liability (-0.71). Although appearing quite the opposite of Group 1 on strict liability attitudes, Group 2 members appear quite similar in terms of their deep-pocket sentiments (-0.26). They are also closer to Group 1 than are other groups in their support of juries over judges in deciding products liability cases (0.60). In terms of membership, Group 2 is relatively large (34 percent of the sample).
Group 3, comprising 19 percent of the overall sample, reflects attitudes that are very different from those of the first two groups. They voiced the highest level of disagreement with statements supporting a tendency to use juries (-0.97) as well as disagreement with deep-pocket sentiments (-0.60). They are also below average with respect to agreement with strict liability (-0.24). In sum, this group appears to disapprove dis·ap·prove
v. dis·ap·proved, dis·ap·prov·ing, dis·ap·proves
1. To have an unfavorable opinion of; condemn.
2. To refuse to approve; reject.
v.intr. of each of the three characteristics believed to be influential in shaping the current products liability legal environment.
Group 4 (31 percent of the sample) is best characterized by high levels of agreement with items supporting deep-pocket awards and strict liability. Group 4 respondents report higher mean scores for items reflecting a deep-pocket sentiment (1.41) and are quite similar to Group 1 in terms of support for the doctrine of strict liability (0.80). With respect to the use of juries rather than judges, Group 4 displayed a relatively low level of disagreement.
To summarize sum·ma·rize
intr. & tr.v. sum·ma·rized, sum·ma·riz·ing, sum·ma·riz·es
To make a summary or make a summary of.
sum the findings from this analysis, it appears that there is evidence supporting four rather distinct segments of consumers based on their opinions toward products liability issues. Group 1 consumers, while relatively small in number, appear most content with the three legal characteristics Friedman (1986) refers to as leading to a "consumerist" orientation. In contrast, Group 3, making up 19 percent of the sample, displays levels of disagreement lower than average on each of these issues. Groups 2 and 4, comprising the majority of respondents, fall somewhere between the extremes with Group 4 being more like Group 1 and Group 2 being more like Group 3. Furthermore, the cluster profiles provide additional evidence of variability in opinions across respondents. For example, while the overall mean (3.00) indicates a neutral attitude with respect to the use of juries rather than judges, each segment appears quite distinct in terms of its opinion toward this issue. That is, no single group is neutral. In sum, there is ample evidence indicating that consumer opinions are not homogeneous with respect to these liability characteristics, and further, it appears that agreement with these characteristics is far from pervasive.
Research question three concerns an attempt to describe each cluster using the socioeconomic characteristics of respondents. There is ample evidence that socioeconomic characteristics relate to attitudes on consumerist-related issues (Cornish and Denney 1989). In addition, similar analyses have been used previously to classify respondents with respect to their attitudes toward product safety (Federal Trade Commission 1983). The relationship between socio-economic variables and products liability attitudes was investigated by cross-classifying cluster membership with each socioeconomic variable.
Table 4 shows the socioeconomic composition of each group. Occupation (p |is less than or equal to^ .002), education (p |is less than or equal to^ .000), and income (p |is less than or equal to^ .016) are all significantly related to the consumerist classification described above. Group 1 has a relatively greater number of respondents reporting blue-collar (BC) occupations than does either Group 2 or 3. In addition, Group 1 is comprised of a slightly greater portion of respondents having 12 years of education or less (60 percent; average is 55 percent). In terms of income, however, they report a relatively high level of membership in the "high income" category. Group 4, which was somewhat similar to Group 1 in their favorable fa·vor·a·ble
1. Advantageous; helpful: favorable winds.
2. Encouraging; propitious: a favorable diagnosis.
3. attitude toward the three "consumerist" characteristics, reports the highest percentage of blue-collar members, as well as the lowest level of education, and the highest percentage of "low income" respondents. Group 3, whose members voiced the strongest disagreement with the three consumerist characteristics, reports the highest number of TABULAR DATA OMITTED respondents having professional occupations, a much higher than average percentage of members having obtained 16 or more years of education (49 percent), but relatively average income. Group 2, which is comprised of members somewhat similar to Group 3 in terms of their support for the present liability environment, is comprised of a high percentage of business people, a higher than average percentage of respondents reporting 16 or more years of education, and respondents with a rather average level of income. Thus, it appears that the four segments do differ in terms of their socio-economic characteristics.
Extension to Other Issues
This section examines other key liability issues to determine if cluster membership (based on opinions toward strict liability, deep pocket, and juries over judges) can be used to predict opinions toward other issues. These issues, as revealed in focus group interviews, are attitudes toward (1) the impact of lawyers on liability costs, (2) the desirability of placing limits on the size of award which a products liability plaintiff can obtain, and (3) the need for all safety features to be included in products regardless of cost increases or other implications. The measurement characteristics for each of these scales are summarized in Table 1.
Table 5 contains results from ANCOVA ANCOVA Analysis of Covariance models exploring relationships between cluster membership and the issues presented above. A preliminary multivariate analysis of covariance Covariance
A measure of the degree to which returns on two risky assets move in tandem. A positive covariance means that asset returns move together. A negative covariance means returns vary inversely. (MANCOVA MANCOVA Multivariate Analysis of Covariance ) shows that overall these three issues are significantly related to the products liability classification factor (p |is less than or equal to^ .0001). Having demonstrated an overall association, individual univariate analyses, controlling for effects of socioeconomic and political characteristics, are discussed below.
Lawyers are to blame
Analysis of the partial F-ratio for the dependent variable "lawyers are to blame," after controlling for socioeconomic characteristics, reveals that it is significantly related to group membership (p |is less than or equal to^ .002). Table 5 also shows standardized variable means for each set of consumers. The superscripts represent Tukey-Kramer comparisons, generally regarded as most appropriate for two-way comparisons in studies with unequal cell sizes (Dunnett 1980). Analysis of these comparisons indicates that the widest variance in opinion exists between members of Group 1 and Group 3 (p |is less than or equal to^ .05). The means further indicate that Group 1 members, relatively speaking, feel that lawyers are not to blame for high products liability costs, while members of Group 3 tend to strongly support this assertion. This finding is consistent with each group's tendencies to support similar stances with regard to products liability policy as suggested by the classification schema.
Occupation, education, and political orientation also have significant partial F-ratios. Because the liability classification "lawyers are to blame" relationship has controlled for these factors, the findings are more likely to be the result of varying products liability attitudes.
TABULAR DATA OMITTED
The partial F-ratio, using "award limits" as a dependent variable, supports the ability of the classification schema to discriminate among opinions on this issue (F = 10.63; p |is less than or equal to^ .0001). The comparisons indicate that Group 1 holds opinions significantly different from those of other groups. The magnitude and directions of their mean scores (-0.47) suggest that they oppose award limits in products liability lawsuits. This finding is also consistent with what would be expected based on the typical profile of Group 1 respondents.
Safety at any costs
Again, the classification schema significantly relates to consumer product safety opinions (F = 5.78; p |is less than or equal to^ .001). The standardized means in Table 5 indicate that the opinions of Groups 2 and 3 differ from those of Groups 1 and 4. Group 4 consumers, and to a lesser extent Group 1 consumers, express relatively high levels of support for "safety at any cost," while Groups 2 and 3 report lower levels of support for this notion. Once again, these responses are consistent with the attitudes used to form the classification schema.
Given the results from estimating these models, it appears the products liability segment to which a consumer belongs, based on his/her agreement with "strict liability," "deep pocket," and "juries over judges" influences his/her opinion on other liability issues as well. Similarly, the ability of group membership to predict respondent attitudes on other liability-related issues helps validate the original classification schemata.
As discussed in the introduction, previous research investigating various parties' opinions regarding products liability issues has demonstrated a wide divergence divergence
In mathematics, a differential operator applied to a three-dimensional vector-valued function. The result is a function that describes a rate of change. The divergence of a vector v is given by in opinion. For example, the opinions of business and insurance executives are not consistent with each other (Bush and Hair 1980), and business executives in general are confused as to what course their product safety and liability policies should take. Numerous industry leaders conclude that liability issues stand out as major impediments IMPEDIMENTS, contracts. Legal objections to the making of a contract. Impediments which relate to the person are those of minority, want of reason, coverture, and the like; they are sometimes called disabilities. Vide Incapacity.
2. to business group (Bacas 1986a; Beaudet 1986). To businesses, products liability represents a continuing threat to solvency and an obstacle to the design and introduction of new products ("Fear of Lawsuits Stymies U.S. Innovation, Execs Say" 1988). The results have serious implications for consumers both in terms of product safety and the number of products available to address their diverse needs. Yet, there has been little attempt to obtain feedback from consumers as to their objective opinion about the products liability legal environment.
This study has focused on opinions of consumers. The importance of consumer opinions cannot be underestimated. The marketing concept dictates that consumer opinions should provide the basis for decisions regarding product introductions and withdrawals (Barksdale and Darden 1971). Friedman (1986) hypothesizes a consumerist sentiment in products liability legislation based on three factors: strict liability, deep-pocket awards, and an over reliance on jury decisions. Friedman claims that this "Robin Hood Syndrome" contributes to what he feels are disproportionately high products liability awards. The data presented in this paper assess the extent to which this sentiment is pervasive among a broad sample of consumers. Some of the more interesting findings arising from the investigation of the research questions are presented and discussed.
* In general, consumers surveyed here tend to disagree with the current trends in products liability legal characteristics.
In contrast to Friedman's assertion that the products liability legal environment is consumerist, consumers surveyed expressed moderate levels of disagreement with deep-pocket and strict liability philosophies, and overall, appear neutral in terms of their support for the use of juries in deciding a preponderance pre·pon·der·ance also pre·pon·der·an·cy
Superiority in weight, force, importance, or influence.
Noun 1. preponderance of products liability suits. It may be that when consumers' opinions are considered outside the legal environment and away from an emotional courtroom setting, the opinions more accurately reflect their true desires (Darden et al. 1991; Thomas 1983). Perhaps in a more detached setting, consumers realize that products liability rulings have implications extending beyond compensating liability plaintiffs to the maximum extent possible. For example, the opinions expressed in this survey may be based on assessments of risk-utility tradeoffs associated with consumer goods consumer goods
Any tangible commodity purchased by households to satisfy their wants and needs. Consumer goods may be durable or nondurable. Durable goods (e.g., autos, furniture, and appliances) have a significant life span, often defined as three years or more, and . Whether or not consumer opinions on this matter would be economically optimal, however, is another matter (Gerner 1988).
* There is evidence of a significant degree of variance among consumer opinions on these issues.
Enough variance in opinions exists among consumers surveyed to support the existence of four products liability opinion segments. While in general, consumers do not appear to favor some current legal characteristics, the four segments uncovered in this sample can be arranged in terms of their proximity to this orientation. Sixteen percent of those surveyed fell into a segment which was quite consistent with the current orientation. A second group, comprising an additional 31 percent of the sample, voiced relatively high levels of agreement with two of the three characteristics. In contrast, the remaining two segments, representing a majority of the sample, held widely disparate opinions and expressed high levels of disagreement with these characteristics. If the opinions revealed are consistent with those of consumers nationwide, evidence is provided that those holding the minority opinion have been quite influential in shaping the current legal environment.
While explanations for the difference in consumer opinions are not clear, some evidence suggests socioeconomic differences are present in the makeup of the segments. The two groups most disagreeing with the three legal characteristics reported higher membership among professional and business occupations, as opposed to blue-collar occupations, and also reported higher levels of education. At least two explanations are apparent for these profiles. First, consumer attitudes may be highly influenced by occupation. For example, strict liability laws may have more obvious implications for someone owning a business than it does for someone employed as a laborer. Second, respondents reporting higher levels of education may feel more confident in making decisions regarding which products are safe and which are not. To this extent, the results provided appear consistent with previous studies relating demographic variables to product safety preferences (i.e., Federal Trade Commission 1983). These consumers may desire more choice in the marketplace, especially in areas where technological advancement may be stifled sti·fle 1
v. sti·fled, sti·fling, sti·fles
1. To interrupt or cut off (the voice, for example).
2. . They may also feel that constraining con·strain
tr.v. con·strained, con·strain·ing, con·strains
1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force.
2. business may lead to "less safe" rather than "more safe" products.
* Consumer products liability segmentation relates to other liability issues examined in this study.
Membership in one of the four consumer segments, even after controlling for socioeconomic variables, significantly predicted consumer opinions on related issues. For example, respondents comprising the group most opposed to current legal characteristics were also shown to favor limits on court awards in liability cases and tended to feel that lawyers have played a significant role in the development of skyrocketing products liability costs. In contrast, the group most in favor of this trend opposed such limits and did not tend to blame lawyers for higher costs. Indeed this group might view lawyers as vehicles for ensuring justice is obtained for consumers injured by a product. Disagreement on whether products should be "safe at any cost" is also apparent, with the more highly educated groups showing relatively lower levels of agreement with these policies. This may be reflective of a realization that if this standard were held for all products, the product assortment in the marketplace would be drastically reduced. That is, can an automobile be made that is absolutely safe, and if so, could anyone afford it?
While it has been suggested that present trends in the products liability environment are consumerist (e.g., Friedman 1986; Rados 1969; Spacone 1985), it is often difficult to determine what is actually best for consumers. Clearly, consumers desire a wide choice of products with assurance that they are reasonably safe. At times these two goals may conflict. The result is a complication complication /com·pli·ca·tion/ (kom?pli-ka´shun)
1. disease(s) concurrent with another disease.
2. occurrence of several diseases in the same patient.
n. of the issue of what is actually best for consumers, which may be a more important question than whether or not these policies are truly consumerist. While this all important question is not definitively answered here, this paper does present opinions which could well express what consumers think is best. Input such as this could be valuable to members of the legal environment and to policymakers who may have previously ignored or downplayed objective consumer opinion.
This paper presents the results of a study showing the varied opinions of a sample of consumers on these important issues. It shows that there is no general agreement concerning current products liability trends. If anything, the evidence may show that consumers would like to see changes implemented in the current liability environment.
In terms of coping with products liability, marketers may see promise in the fact that respondents with higher levels of education are more likely to be aware of the problems associated with trading risk for utility. If more informed consumers feel more confident about making their own decisions, educational support by corporate leaders may work to their advantage while benefitting consumers. Businesses should also consider the advantages of training all potential customers in the safe use of their products. Further, consequences of unanticipated misuses of products can be demonstrated as an ongoing program of public education. For example, owners of Grumman "Yankee" airplanes have available to them special training in the proper and safe use and maintenance of that particular aircraft. Educational programs such as these not only educate the public as to proper product use, but might also serve to enhance the firm's image as a corporate citizen. Such programs can attempt to head off potential crises before they occur.
This paper provides some valuable input in the form of objective consumer opinions. While all consumers desire safe products, their opinions as to the consequences of product safety legislation appear to vary to a great extent. Certainly this study is only a first step. Further research is needed to investigate issues including the stability of these opinions over time and their impact on trends in liability legislation and rulings. Also, more work is needed to specifically address consumer opinions on related issues. For example, how much convenience and choice would consumers be willing to give up to ensure safety? In other words, how do consumers feel about risk-utility tradeoffs? Study is also required to determine other factors that might shape consumer opinion on product safety issues. For example, what is the impact of various forms of education on the public's attitudes toward liability? Or what is the relative impact of specific information (perhaps one case description) compared to general information about product safety? This may help explain the apparent dichotomy di·chot·o·my
n. pl. di·chot·o·mies
1. Division into two usually contradictory parts or opinions: "the dichotomy of the one and the many" Louis Auchincloss. in consumer opinion based on juror versus consumer behavior. Addressing these topics may show policymakers how consumers feel about these issues and help to create public policy which agrees with consumer desires. Whether or not this will lead to what is truly best for consumers remains uncertain.
1 In addition, issues reflecting the three principles that would form a Robin Hood Syndrome (strict liability, deep-pocket awards, and juries over judges) were frequently discussed in these interviews.
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William R. Darden is Piccadilly Cafeterias Picadilly Cafeterias is a chain of cafeteria restaurants found primarily in the Southern United States.
The company began with a single cafeteria in Baton Rouge, Louisiana in 1944, founded by T.H. Hamilton. Today, the chain operates 130 locations in 15 states. Distinguished Professor of Marketing, Louisiana State University Louisiana State University and Agricultural and Mechanical College, generally known as Louisiana State University or LSU, is a public, coeducational university located in Baton Rouge, Louisiana and the main campus of the Louisiana State University System. , Baton Rouge Baton Rouge (băt`ən rzh) [Fr.,=red stick], city (1990 pop. 219,531), state capital and seat of East Baton Rouge parish, SE La. ; Barry J. Babin is Assistant Professor of Marketing, University of Southern Mississippi, Hattiesburg; Mitch Griffin is Assistant Professor of Marketing, Bradley University Bradley University is a private, co-educational university located in Peoria, Illinois (Coordinates: ). It is a medium sized institution with an enrollment of approximately 6,100 undergraduate and postgraduate students. , Peoria, IL; and Ronald Coulter is Professor of Marketing, Southwest Missouri State University Missouri State University is a state university located in Springfield, Missouri. It is the state's second largest university in student enrollment, second only to the University of Missouri. From 1972 to 2005, Missouri State was known as Southwest Missouri State University. , Springfield.