A study at the University of Missouri shows that American consumers tend to overvalue “made in USA” products compared to products made outside the country.
Professor Jung Ha-Brookshire says consumers place a much higher value on apparel produced in the U.S. with U.S. materials as opposed to products made partially or entirely overseas and thinks that American consumers should be better educated so they can better judge product values when they see a “made in USA” label.
The study was controlled by hypothetical estimation of comparing two shirts that looked exactly alike and made with the same clothing material. The only thing that was different was the label placed on the inside seam of the shirt. When consumers were asked about which shirt cost more in value, American consumers assumed that because one shirt was made in the United States, and the other was made in China, that the America product would be too expensive for them to buy and therefore, went with choosing the Chinese made shirt to buy instead because they presumed that it was more affordable.
“The bigger picture is that consumers over value the U.S. components of manufactured clothing,” she says. Ha-Brookshire says the over value is so high; she worries that it could be damaging for domestic businesses and manufacturers. The perception on placing high value on American products could also hurt the overall economy.
She says retailers and manufacturers should communicate with their customers better to lessen the perception that American consumers make about U.S. made products having a higher value than products made outside the country, such as China. “If they don’t communicate their realistic pricing strategy well with their consumers …the consumers extremely over value U.S. components, U.S. labor and U.S. materials,” she says.
Ha-Brookshire says American consumers need to be better educated so they can better judge product values when they see a “made in USA” label. “Businesses that are using U.S. components should communicate with their consumers better and educate them about the fact that the product was made in the United States, with U.S. cotton doesn’t mean that it’s that much more expensive,” she says.
AUDIO: Mary Farucci reports. (1:02)