Consumer’s Awareness

Consumer’s awareness would undoubtedly affect the participation rate of RMP in Hong Kong. It is easy to understand that the fewer the people aware of the RMP launched, the fewer the people would apply RMP. Yet, awareness does not focus only on whether the people have heard of something, but also the understanding on something. Hence, the previous studies on reverse mortgage in U.S. also investigating the consumer’s understanding on reverse mortgage.

In this study, Part II of the questionnaire survey was conducted to assess the awareness and understanding of the respondents on RMP. The results and analysis of the data collected are shown in the following respectively.

4.2.1 Awareness

Question 2.1 “Do you know the RMP launched in Hong Kong?” and question 2.3 “From which medium you heard about RMP?”

investigating the respondents’ awareness to RMP. According to Figure 1 as shown below, 57.9% of respondents replied “Yes” in question 2.1 whereas 42.1% of respondents replied “No”. It shows that around 60% of respondents knew that RMP was launched in Hong Kong.

Figure 1: Do you know the RMP launched in Hong Kong?

No 42.1%

Yes 57.9%

The result of question 2.1 is somewhat beyond expectation.

According to the studies of AARP survey in 2007, 70% of respondents in U.S. stated that they have heard of reverse mortgages.

And according to the studies of Harris Interactive survey in 2007,

64% of respondents revealed that they aware of the reverse mortgage as one of the mortgage products. Combining the findings of these two surveys, it shows that the awareness of reverse mortgage in U.S. was around 60% to 70% even the programme started over 10 years. It is surprised that the awareness of reverse mortgage in Hong Kong is similar to that in U.S. although the programme was launched only around 3 years. The high level of awareness in Hong Kong may due to effective promotion. As the size of Hong Kong is much smaller than U.S., promotion of reverse mortgage is much easier in Hong Kong than in U.S. However, the high awareness did not contribute to the participation rate of RMP. In other words, there should have some other factor(s) hindering the participation rate of RMP in Hong Kong.

In short, the level of awareness may not be the crucial reason influencing the participation rate of RMP in Hong Kong.

Besides, according to Figure 2 as shown below, 85.5% of respondents replied “Media” in question 2.3; 1.8% of respondents replied “Bank”;

12.7% of respondents replied “Relatives or Friend” and 0% of respondents replied “Others”. It indicates that most of the respondents

heard about RMP from media. Only few of them heard about RMP from other sources, which is not significant in comparison.

Figure 2: From which medium you heard about RMP?

Bank

The result of question 2.3 is remarkable. Although it is believed that media would dominate the information provided regarding RMP, over 80% of respondents revealed that they heard about RMP from media is still surprisingly high. The finding concurs with the idea from Piotrow et al. (1990) that mass media can be a powerful too not only for creating awareness about new technology but also for stimulating people’s desire for more information and facilitating their efforts to apply the information to their own behavior. According to the finding, the HKMC and the related planners should further make use of the media to promote RMP. A well-designed media campaign can be

effective in creating a positive social environment for a behavior by bringing about shift in popular opinion (Parlato, 1990). In addition, since only one (1.8%) respondent replied that he/she had heard about RMP through bank, the result is totally disappointed and the participated banks are recommended to spend more effort on the promotion of RMP. The details would be discussed in Chapter 5 – Recommendation subsequently.

4.2.2 Understanding

Question 2.2 “Please rate your level of understanding about RMP”

investigating the respondents’ understanding to RMP. According to Figure 3 as shown below, 23.6% of respondents replied “Very Low”

in question 2.2; 52.8% of respondents replied “Low”; 23.6% of respondents replied “High” and 0% of respondents replied “Very High”. It shows that over 75% of respondents do not have sufficient understanding to RMP (i.e. including the categories of “Very Low”

and “Low”).

Figure 3: Please rate your level of understanding about

According to the studies of Harris Interactive survey in 2007, 19% of respondents expressed “not at all knowledgeable” to reverse mortgage; 33% of respondents expressed “slightly knowledgeable”;

34% of respondents expressed “somewhat knowledgeable” and 15%

of respondents expressed “very knowledgeable”. Comparing this to the data of Figure 3, it seems the people in U.S. are much familiar with reverse mortgage. However, according to the studies of survey conducted by Stephanie and George in 2009, open-ended question was asked which most of the respondents revealed that they have limited knowledge and even no knowledge to reverse mortgage. In comparison, the level of understanding to reverse mortgage in Hong Kong seems even better than in U.S. Given the results of these two

surveys in U.S., the condition in Hong Kong and U.S. is somewhat the same. Most of the people do not have sufficient understanding / knowledge to RMP. In this connection, people could not know clearly whether they are eligible to apply RMP and/or RMP is suitable for them. It inevitably hinders the participation rate of RMP. On the other hand, indeed, not many people (i.e. 23.6%) replied “Very Low” in this question. It means that over three fourth of the respondents have basic knowledge / understanding on reverse mortgage. It is similar to the findings in U.S. Also, over 50% of respondents replied “Low” in this question. Should more information could be provided to this category of respondents, the overall level of understanding would be much higher and the participation rate may be enhanced. The studies of survey conducted by Stephanie and George in 2009 shared similar idea, they found that they were able to change respondents’

perception of the program in a positive manner simply by describing some of the basic features.