The economics of consumer knowledge

While approaches to measuring the state of a consumer's knowledge are well developed, much less is known about the relationship between knowledge and consumer choice and information search. The purpose of this article is to explore these relationships by treating consumer knowledge as human capital, which affects the full price of consumption and search activities. Using this framework, models are presented to explain life cycle consumption patterns, lifestyles, brand loyalty, choice of features, and search behavior. This economic perspective is compared and contrasted to other consumer research on these topics, including recent qualitative research that examines consumption behavior.