“¡Chalinas a 20 Pesos!”: Children’s Economic Ideas Developed Through Selling

Abstract

This article explores the economic ideas of indigenous Triqui children who sold artisanal goods in Oaxaca, Mexico. I approached the investigation of economic ideas by focusing on the ways in which children interacted with customers while trying to sell their goods. Using observations and interviews, I found that as children tried to convince customers to buy goods, they generated spontaneous economic ideas about the value of goods. This study provides an exploratory first step to understanding children’s development of economic ideas through everyday activity and reveals nuances in economic ideas that would otherwise remain hidden.

INTRODUCTION

Children who live in poverty in developing countries often must work for a living; a child’s success in work is consequential for his or her family’s livelihood. Many of these children have no consistent access to high-quality schooling and thus are considered to be lacking in academic knowledge. However, studies have shown that children develop rich forms of mathematical knowledge through participation in out-of-school activities, pointing to the close link between cognitive development and sociocultural context (Nasir, 2000; Saxe, 1991; Saxe & De Kirby, 2014; Sitabkhan, 2009). This line of research has revealed a good deal about children’s mathematical development through everyday activities, but the development of their economic concepts remains a significantly understudied area.

There is some irony to the focus on mathematics, as many studies on children’s out-of-school mathematical development target the economic activities of buying and selling (Guberman, 1996; Khan, 1999; Saxe, 1988; Taylor, 2009). Of the studies that do exist on children’s developing economic understandings, most focus on children’s grasp of formal economic concepts taught in school, such as supply and demand (Berti & Bombi, 1981; Berti & Grivet, 1990; Leiser & Halachmi, 2006; Siegler & Thompson, 1998; Thompson & Siegler, 2000). This exclusive focus on school-based economic ideas limits our knowledge of the economic understandings that children may be developing in out-of-school practices.

In this article, I report on a study of children’s developing economic concepts and their relationship to activities of daily life. My focus is on poor children who sell artisanal objects to help support their families and themselves. The purpose of my research was to increase our understanding of the character of children’s economic concepts developed through participation in a buying and selling practice. What is the character of these ideas, and what is their relationship to the specifics of the practice?

In undertaking this research, I drew on the large body of literature that investigates relationships between culture and cognitive development. In a recent review of this literature, Saxe and De Kirby (2014) discussed two alternate approaches to the study of culture and cognitive development. In the first, “dichotomous approach,” culture and cognitive development are treated as two separate variables, where measures of cognitive development, such as IQ tests or standardized testing, are explained by cultural factors, such as socioeconomic status, levels of poverty, and parental involvement. In the second, “intrinsic approach,” culture and cognitive development are assumed to be interwoven and mutually grounded in everyday activity.

One way to frame an investigation using an intrinsic approach is to use practice as a unit of analysis (Cole, 1996, 2006; Gutierrez & Rogoff, 2003; Lave & Wenger, 1991; Saxe, 2004; Scribner, 1985). By a practice I mean a recognizable form of socially organized activity with a history among a community of people. In this article, I present a case study illustrating an intrinsic approach by highlighting the interwoven nature of children’s developing ideas concerning the value of goods as a core economic idea that emerges in the selling practice.

ECONOMIC PRACTICES

Many studies have established that economic practices such as buying and selling are sites for the development of arithmetical knowledge (Guberman, 1996; Khan, 1999; Saxe, 1991; Taylor, 2009). These studies showed that children can learn numeric and arithmetic understandings and operations through exchanges, such as using coins and bills as a support in calculating total price and developing arithmetic strategies for pricing goods (Guberman, 1996; Saxe, 1991; Taylor, 2009).

For example, Saxe (1991) conducted a comprehensive study in northeastern Brazil that investigated the mathematical understandings of young candy sellers. Children purchased boxes of candy at wholesale prices. They then priced the candies, determining how much revenue they would earn once all the candies in a box were sold by creating unique arithmetical strategies. The author identified “how sellers determine the price” as a recurrent mathematical problem that supported the generation of new arithmetical strategies.

Understanding how to price candies, however, may involve other types of knowledge than just using arithmetical strategies, such as knowing which types of candy are the most attractive to customers and therefore command a higher price. In my study, I shift the focus from recurrent mathematical problems to recurrent economic problems, where the focus is successful selling, not accurate numerical strategies. This shift allowed me to conduct an analysis of children’s emerging economic ideas, in particular children’s developing understandings about the monetary value of goods.

ECONOMIC IDEAS

One obvious approach to documenting the character of children’s economic ideas would be to look to the field of economics, in which basic concepts such as supply and demand have been used to model economic activity; this modeling is the focus of explicit instruction in school. But, I argue, there may be little resemblance between formal economic models and the economic ideas that young sellers are developing in their everyday economic activities. To begin with, using economic models as a basis to probe economic understandings of young sellers may lead investigators to largely sidestep children’s developing ideas. Instead, I drew on Vygotsky’s (1986) useful differentiation between scientific and everyday (spontaneous) concepts to organize this investigation.

According to Vygotsky (1987), scientific concepts are generalized and acquired through formal instruction. Spontaneous concepts are local and acquired through everyday activity. Studies in mathematical development have already established differences between scientific, or formal, and spontaneous, or informal, mathematical concepts (Brenner, 1998; Ginsburg, Klein, & Starkey, 1998; Nunes-Carraher, Carraher, & Schliemann, 1987; Schliemann, Araujo, Cassunde, Macedo, & Niceas, 1998). Formal mathematics in this literature refers to the mathematics that children learn in school; informal mathematics refers to the mathematics that children learn in activities outside of school. A young child may learn how to equally share six mangos among three friends informally, based on local ideas of fair sharing. When this same child goes to school, she may learn that fair sharing is achieved by a mathematical algorithm called division and is introduced to symbols that represent the operation.

These understandings are well documented in the domain of mathematics. In economics, although the precise nature of scientific concepts and children’s development of these concepts has been studied, spontaneous concepts have not. Nonetheless, the literature investigating children’s understanding of scientific concepts provides a useful starting point for this investigation.

Much of the prior work on children’s development of scientific economic concepts has focused on children’s understandings of the supply and demand model (Berti & Bombi, 1981; Berti & Grivet, 1990; Siegler & Thompson, 1998; Thompson & Siegler, 2000). This model can be seen as the product of a long history of scholars’ intellectual work to model and understand economic activity. In a supply–demand model, supply refers to the goods that are available to individuals; it may include both the manufacture and the availability of a good. Demand refers to how much of that good individuals want, and it frequently takes into account how much they are willing to pay for it. These economic concepts are commonly presented in high school and entry-level college courses in the United States (see, e.g., California Department of Education, 1998).

I argue that supply–demand models take exchanges that are broadly distributed among numerous actors across multiple locations, aggregate them, and then abstract these local exchanges into a model that explains how a good’s price is determined by shifting relationships between the supply of goods and the demand for these goods. No one individual completely controls the price of goods; price is determined by many actors, who may not be conscious of effects they have on prices.

In the prior empirical studies where investigators document developmental trajectories of children’s understandings of supply–demand models, children are often provided with scenarios of economic activity and asked to provide explanations of what would happen. For example, in a study by Siegler and Thompson (1998), protagonists were portrayed as selling lemonade on a hot day, and participants were asked what would happen to the price of lemonade if the temperature rose.

These investigations view the domain of economics as an entirely scientific domain, where the ideas that exist were developed over the course of human history. Another view is that there are indeed local ideas developed through engagement in every activity and that these ideas may differ in character from their formal counterparts. This view is supported by the large body of literature on relationships between culture and cognitive development, where the ideas individuals develop are closely linked to the structure and organization of the practice in which they participate (Cole, 1996; Saxe, 1991). Assuming that individuals do develop economic ideas through participation in cultural practices, the question becomes, What are these spontaneous ideas, and how might children develop them?

In the domain of economics, children may develop ideas of the value of goods in transactions that are specific to the interaction situated within the relevant practice. There may be multiple ways to determine value in this interaction, such as basing the value on the directives of an authority figure or the seller’s personal preferences. As they sell, children may develop economic ideas such as how to set a price that supports sales and how to maximize profit. These developing ideas may be local to the seller’s exchanges and distant from supply–demand models that students may learn in school. Such local ideas—or spontaneous concepts—that are of immediate concern to young sellers are the focus in the data to be presented next.

In the remainder of this article, I document the kinds of problems that sellers were involved in as they prepared for and participated in exchanges, and the economic thinking of the sellers related to the exchanges.

METHODS

Participants and Setting

The children who participated in this study were members of the indigenous Triqui ethnic group who sold artisanal goods for a living in Oaxaca, Mexico. Similar to other indigenous populations in Mexico, these young sellers all live in poverty (Instituto Nacional para la Evaluación de la Educación, 2007; Parker, Rubalcava, & Graciela, 2002). Thirty-three children between 7 and 15 years of age were observed as they engaged in selling artisanal goods; follow-up interviews were conducted with 29 of these 33 children.

I conducted observations and interviews in the large main plaza in the historic center of Oaxaca City. Oaxaca City (Oaxaca de Juarez) is the capital of one of Mexico’s poorest states, Oaxaca. According to the National System of Municipal Information of the Governance Secretariat (Secretaría de Gobernación), Oaxaca City has a population of approximately 265,000 and is home to numerous indigenous groups, including the Zapotec, the Mixtec, and the Triqui, who are the focus of this article.

The plaza contains a museum, a church, restaurants, benches, and ample vendors selling a large variety of goods. Like many cities in Mexico, the main plaza is a central meeting place for locals and tourists alike, and it is always full of people. Many people linger in the main plaza for extended periods, as it provides a respite from the hustle of the city. The restaurants around the edges of the plaza are some of the most popular places for people to linger, and children’s selling activity is concentrated at these restaurants, where they frequently approach customers.

The children and their families (who were likely to be nearby) were initially wary of me. Consequently, most of my initial conversations with the children ended (understandably) with their trying to sell me something. As part of my effort to gain access to the children both for observational and interview purposes, I volunteered with a local nonprofit organization that provided educational and health services to Triqui children and their families.

Documenting Practices

To document the selling practice and the types of problems that emerged for children, I conducted observations over 7 weeks and, with their consent and cooperation, I shadowed two young sellers to obtain a better idea of the overall content of their activities. In all observations, I noted the recurrent structures of the selling practice, the economic problems that arose in transactions, and sellers’ solutions to these problems. In particular, I was interesting in sellers’ “sales pitches,” or what the young sellers said or did to convince customers to buy goods.

The following example provides a typical description of the observational data and the way in which I coded it for purposes of documenting the economic issues that arose.

Consider this observation of a 9-year-old seller in Oaxaca, in which the seller is engaged with a customer: The seller approaches two customers sitting at a restaurant table in the main plaza, selling two types of necklaces. One type of necklace, made of beans and seeds, costs 10 pesos; the other type of necklace, made of stones, costs 20 pesos. The seller attempts to sell the 20-peso necklaces by carefully choosing two 20-peso necklaces that match the clothes of the customers and putting the necklaces on them. When one of the customers shows interest in the 10-peso necklace, the seller tries to refocus the customer’s attention on the 20-peso necklace by pointing out that it is made of stones. She states that it took her a long time to make the necklaces. Eventually, one of the customers decides to buy one 10-peso necklace.

Several economic ideas are apparent in the seller’s strategies for successful selling. First, in order to begin the exchange, the seller needed to state the value of the necklaces so that the customer could engage with the seller in the exchange; the seller stated the value as a currency price. In this interaction, the exchange value of the necklaces was equated with the currency prices of 10 and 20 pesos, respectively. Second, to maximize revenue earned, the seller needed to formulate a strategy to convince the customers to buy the goods that yielded the higher profit. To do this, the seller linked the prices and the quality of the necklaces when she emphasized the process of making them. It may be that the seller had a rudimentary idea of the ways in which price is determined by drawing upon her knowledge of the production and raw materials of the necklaces.

Interviews Based on Selling Practices

I presented the 29 children who agreed to participate with a semistructured interview consisting of bartering tasks that were based on the structure of the selling practices I had been observing. The bartering tasks aimed to provide an in-depth understanding of children’s ideas of the value of goods. I created scenarios in which children were asked to imagine that they were selling a particular good, but another seller wanted to engage in a barter trade. I used barter trades instead of the currency trades children were accustomed to in the practice because I did not want to assume that children would use price to determine the value of goods; instead, I wanted to understand if children would make reference to price during the interview spontaneously. The goods involved in the interview problems were those that they sold in the practice.

For example, one task asked children to imagine they are selling a shawl (normally priced at 20 pesos, but the price was not explicitly stated to the child). Another seller approaches them and wants the child to trade the shawl for a necklace (normally priced at 10 pesos, but again, not explicitly stated). I asked the children if they would trade their shawl for the necklace. Their response of either yes or no was considered their judgment for that particular task. I then asked the child, “Why?” and considered the answer their justification. I provided different bartering scenarios, which I expected would elicit different judgments and justifications and reveal nuanced understandings of the value of goods.

RESULTS

I first summarize the results obtained from my observations of children’s sales pitches in their ongoing selling practice. I then present the data from the interview problems.

Sellers’ Use of Sales Pitches

Because I approached the observations with the idea that children’s use of sales pitches would provide insight into children’s spontaneous economic ideas about the value of goods, I focused only on observations in which a seller was able to use a sale pitch (n = 19). (In many observations the seller did not have an opportunity to use a sales pitch because the customer either ignored the seller or told her to leave. In the transactions involving sales pitches, I found several patterns including showcasing the goods, emphasizing the quality of the goods, emphasizing the (low) price, and relying on the seller’s age (i.e., the compassion factor). For example, the 14-year-old seller in the following observation showcased the goods and emphasized the price:

The seller approached the table of the two customers saying, “Necklaces?” The two customers indicated to the seller that they were interested in seeing the necklaces. The seller then chose one necklace and put it around the customer’s neck. The seller said, “It [the necklace] looks good on you. It matches well with your outfit. Buy one from me, it’s only 10 pesos.” Her sales pitch consisted of showcasing her goods to demonstrate their quality and emphasizing the low price of the necklace.

Showcasing the goods (95%) and emphasizing the price (89%), both of which this seller used, were among the two most frequent sales pitches. Showcasing the goods included the sellers displaying the different colors and styles of necklaces, bracelets, and shawls that they were carrying with them. For example, a 7-year-old female seller, selling bracelets for 10 pesos, placed the bracelets on the table and encouraged the customers to look through them and choose one they liked. However, the seller did not say anything else to convince them to buy a bracelet.

For emphasizing quality, sellers highlighted one or more qualities of the good being sold. The seller discussed how the good was made; the quality of the raw materials to make the good; the time spent in making the good; and/or the beauty of the good in terms of color, pattern, or style. Often, the seller showed the customers how he or she made the good. For example, a 7-year-old boy, selling bracelets for 10 pesos, pulled out bracelets that were not completed and modeled how he braided the string on the bracelets.

The third pattern, emphasizing price, was also very common, appearing in 89% of the sales pitches. For example, a 10-year-old boy, selling shawls for 20 pesos each, or three for 50 pesos, approached a group of customers and said, “Some shawls? For the head, waist, and skirts? Three for 50. Three for 50. Some shawls?” This seller repeated the price numerous times.

The youngest sellers sometimes used a fourth type of sales pitch, relying on age, in which they played on customers’ sympathies. This sales pitch was less common, occurring in only 16% of the observations. Although many customers were sympathetic to the children’s plight, they were particularly sympathetic to the youngest ones. For example, a 7-year-old girl, selling bracelets for 10 pesos, approached a table of customers and smiled shyly at them. She did not say anything and did not show her goods to the customers, yet one customer bought a bracelet from her.

The observations of sales pitches yielded important insights into children’s everyday economic activity and some clues as to their economic ideas. Variety is prominent; children may have been determining the value of goods through price, or quality, both or neither. I turn now to the results from the interviews to obtain additional data about children’s everyday ideas concerning the value of the goods they were selling.

Children’s Ideas of the Value of Goods

I examined all judgments children made on the two scenarios. The first scenario, child loses, was a trade of one 20-peso shawl for one 10-peso necklace. The second scenario, child gains, was a trade of one 20-peso necklace for five 10-peso necklaces.

An advantageous judgment in the child loses scenario would involve the child not accepting the trade. An advantageous judgment in the child gains scenario would involve the child accepting the trade. Examination of the judgments in this way was an important first step in interpreting children’s understandings of the value of the goods, as it provided an anchor for explaining ideas about value. In addition, examination of the judgments provided immediate insight into children’s understanding of the relationship between the value of the good they were selling and the currency price. In the child loses scenario, 97% of sellers made judgments that would be advantageous to earning cash. In the child gains scenario, only 48% of sellers made advantageous judgments. The results from the child loses scenario support the idea that sellers were using the price of the goods to determine the value of the goods. However, the results from the child gains scenario are surprising, as 52% of sellers made disadvantageous judgments. To investigate how this could be, I explored the children’s justifications.

I looked for references to price within the justifications, as I was interested in investigating whether children would draw upon price spontaneously. Justifications that referenced price did so either quantitatively (e.g., stating a currency price) or qualitatively (e.g., comparing values using words such as “more expensive” and/or “equal in cost”). For example, in the child gains scenario, a 7-year-old seller said that she would accept the trade because “five necklaces are 50 [pesos] and one shawl is 20 [pesos] so it’s more for the necklaces.”

A majority of sellers referenced price on both scenarios. In the child loses scenario, 97% of sellers referenced price; on the child gains scenario, 72% of sellers referenced price. Given that in the selling practice in Oaxaca, artisanal goods were assigned prices, participation in this practice may have served as a context for the equating of the value of goods to the currency price. However, it was unexpected that 52% of children in the child gains scenario made disadvantageous judgments, even though many of them were referencing price.

I assumed that reference to price would always be related to advantageous judgments in this scenario, as sellers would gain cash value by accepting the trade. It may be that the use of price was more nuanced than I initially assumed, and perhaps the use of price was not as straightforward as children comparing the total prices of the goods. To investigate, I identified patterns in use of price that emerged in the justifications of sellers that made disadvantageous judgments (n = 12).

Five of the 12 sellers who made disadvantageous judgments were concerned about the fairness of the exchange as measured by the price. For example, a 14-year-old seller justified her refusal to trade one shawl for five necklaces by saying, “Because I’ll be abusing his confidence, and since he’s a fellow seller, no.” I interpret this justification as one in which the seller recognized that the price of the five necklaces was greater than the price of one shawl and that trading her shawl for the necklaces would lead to a gain in cash value; however, the trade would not be fair to the other seller. Some young sellers may have been conscious of fairness between sellers, in particular because many sellers were often members of the same family group that shared living expenses. Their justifications reflected a concern with the cohesiveness of the community, not individual earnings.

Seven of 12 sellers emphasized the quality of the item with the highest unit price . In both scenarios, the shawl was the item with the highest unit price (20 pesos) and the necklace was the item with the lowest unit price (10 pesos).¹ Children’s justifications emphasized a feature of the item with the highest unit price. These features all reflected children’s understandings of the effort required to sell an item and earn cash, and include knowledge of customer preference (e.g., customers buy the shawl more than the necklaces), origin of the good (e.g., the shawls are harder to make than the necklaces), and/or utility of the good (e.g., the shawls keep people warm, the necklaces do not). For example, an 8-year-old seller declined the trade with the justification, “Because we make the shawls. The shawls are more expensive because they are the shawls.” This seller emphasized the handmade origin of the shawl and then stated that the shawls are more expensive. Although he did not mention the necklaces, there was an implicit comparison of the shawls and necklaces. This seller did not just use price to determine the value of the good, but also drew upon a feature of the good, in this case its origin. A 13-year-old seller declined the trade with the justification, “It doesn’t work for me. It’s 50 [pesos], but what if they don’t sell. People like the shawls better than the necklaces.” This seller also did not just use price to determine the value, instead relying on her knowledge of the relationship between customer preference and price to justify her judgment.

Although used to justify a disadvantageous judgment, the justifications using unit price still reflect a concern for earning cash value. On one hand, sellers may have generated ideas that the good with the highest unit price yields the highest amount of cash value for the least amount of work. In essence, it takes the same amount of effort to sell one shawl for 20 pesos as to sell one necklace for 10 pesos. That is, sellers would have to work twice as hard to sell two 10-peso necklaces in order to make the same amount as if they sold one 20-peso shawl. As indicated previously, sellers often chose which goods to emphasize as they approached and tried to sell goods to customers. Their understanding that they earn more money selling one shawl than selling one necklace may have factored in to how they tried to convince customers to buy goods.

On the other hand, sellers may have been conscious of how customer preference affected sales. Many sellers pointed to customer preference for the shawls above the necklaces, suggesting that they believed it was easier to sell a shawl than a necklace. Even if the prices had been equal, it would still be easier to sell one shawl than to sell one necklace due to the customer preference for the shawls.

The different uses of price point to sophisticated ideas about the value of goods. For many children, the value of the good was not determined solely by price. Instead, aspects of the practice, such as the emphasis on family groups and the preferences of the customers, were interwoven with price when determining the value of goods. Of course, there are limitations in understanding the many nuances of children’s uses of price due to the restriction to two artisanal goods in the scenarios. For example, it may be that the shawls have a special status in the practice in Oaxaca, and instead of valuing the good with the higher unit price children are simply valuing the shawls above all other goods. Additional research that involves goods other than shawls and necklaces may address these concerns.

There were some sellers who did not reference price at all and made judgments irrespective of the price. I looked for additional patterns in the justifications across the two scenarios that contained no reference to price and found two patterns.

Some justifications involved the number of goods without consideration of the price. The justifications using quantity may be based only on the idea of a simple numeric comparison, where more of something is better than less. For example, an 8-year-old seller, in the child gains scenario, said that she would accept the trade because “there are five necklaces, and only one shawl.” This seller referenced only the number of goods, without regard for the price.

Some justifications referenced authority figures in the practice, either adults or older children. An 8-year-old seller, in the child gains scenario, responded, “No, because my mom won’t let me exchange necklaces for shawls.” Many sellers may have viewed the value of their goods as determined by the directives of an older seller. Because children often sold in family groups, younger sellers learned through apprenticeship.

CONCLUSION AND NEXT STEPS

The purpose of this research was to explore the economic ideas that young children generated by selling artisanal goods in Oaxaca, Mexico. My overarching concerns were to link children’s engagement in exchanges with their spontaneous economic ideas and to understand the character of these economic ideas. I found that children’s sales pitches, which they used to convince customers to buy goods, highlighted features of the goods that were then reflected in children’s ideas about the value of goods. In seller’s responses to the interviews, price was frequently used to determine the value of goods in an exchange, though in very different ways. By approaching this investigation through the lens of spontaneous concepts, I was able to document nuances in children’s economic ideas that otherwise would have remained hidden.

This study was an exploratory first step, and more work is needed both to expand the types of ideas developed here and to focus on a range of practices. Future studies may investigate groups of children engaged in different and more complex out-of-school practices, focusing on probing the data for variations and patterns instead of searching for evidence that ideas exist as conventionally defined in academic economics. For example, studies may focus on children who run errands for parents, children who may contribute to household income through work in family businesses, or children who participate in savings and banking activities.

Another possible area of investigation stemming from this study is to improve financial education. It is increasingly claimed that financial literacy, based on a solid understanding of economics, is crucial for the globalized world that children are entering. Instruction can be improved if we better understand the relationships between formal and informal ideas about economics. For example, spontaneous ideas about the value of goods can be drawn upon when teaching a lesson on supply and demand. In turn, an understanding of the formal supply–demand model may lend new understanding to children’s spontaneous ideas about the value of goods. It may be especially important to make these connections for children such as those in this study, who are economically, linguistically, and ethnically marginalized. Building from the literature that seeks to bridge formal and informal mathematics (Brenner, 1998; Civil, 2002; Taylor, 2012), future studies may investigate the role of instruction and the types of instructional practices that support these children in creating more powerful economic understandings.

FUNDING

The research reported here was supported in part by the Institute of Education Sciences predoctoral training grant R305B090026 to the University of California, Berkeley. The opinions expressed are those of the author and do not represent views of the Institute of Education Sciences or the U.S. Department of Education.

Additional information

Funding

The research reported here was supported in part by the Institute of Education Sciences predoctoral training grant R305B090026 to the University of California, Berkeley. The opinions expressed are those of the author and do not represent views of the Institute of Education Sciences or the U.S. Department of Education.

Notes

¹ There were other commonly sold goods that had higher unit prices than the shawl. I chose the shawls and necklaces for the interview items because they were the most common goods sold.