There has been a lot of talk in the industry regarding the relevance of LSMs (Living Standard Measure). Kantar TNS was approached by the industry to develop a new socio economic segmentation system to better reflect the South African landscape.
Developed by Neil Higgs and his team at Kantar TNS, the new SEM (Socio-Economic Measure) household continuum is a more accurate reflection of South African society in terms of how people live and is not dependent solely on durables.
“SEMs provides a statistical and technical solution to the household continuum and speaks to how South Africans live and not what they have,” says Peter Storrar, Kantar TNS lead on the ES Survey conducted for the industry, funded by the Publisher Research Council (PRC) and the Broadcast Research Council (BRC).
The international measure of income distribution is the Gini coefficient, and South Africa has one of the highest in the world, in other words, we have a very unequal income distribution. As can be seen in the graph below, the SEM distribution reflects this.
LSM VS SEM PROFILE OF SOUTH AFRICAN HOUSEHOLDS
Source ES: 6 months Jul-Dec 2016
Peter Langschmidt, consultant to the PRC , says, “If only the LSM – almost perfect bell shaped population – distribution were true, we would have a massive middle class, and an income distribution like Canada or Australia. However, we don’t as we are still suffering the after effects of 350 years of colonialism, 50 years of Apartheid and 10 years of corruption, so our Gini coefficient is still incredibly high.”
The LSM shows that only 6% or 1 in 17 houses is in the bottom LSM 1-3 group, the SEM shows that 44% or 1 in 2.3 households are struggling. In terms of the all important LSM 8-10 group, which receives over 70% of advertising spend, the SEM also outperforms the LSM with 19% of household’s vs 14% for the LSM.
In terms of practicality the SEM also has numerous advantages over the LSM’s. With 14 variables, versus the 29 on LSM’s, questionnaires are shorter and easier to administer. SEMs are also more stable due to less reliance on durables and more reliance on household structures and community infrastructure which change more gradually.
The only four durables that have been included in the final variables are deep freezer, microwave oven, floor polisher or vacuum cleaner and washing machine. The others are post office nearby, police station nearby, built-in kitchen sink, home security service, motor car, floor material, water source, type of toilet, roof material and number of sleeping room.
As promised the LSM will be run in parallel with the SEM for a period of two years until 2018.
“If you or your clients believe in fairytale income distribution that goes against all census and Stats SA data and even the Easter Bunny then continue to use the LSM’s; but if you believe in an inequitable distribution and the 17 million life supporting grants that real people receive each month, then you must use SEM’s,” concludes Langschmidt.
For additional information and reading research visit www.prc.za.com.
Latest posts by Journo (see all)
- Why you need to be a shapeshifter to get ahead in your career - 16th January 2019
- New on black: Spike Lee Movie BlacKkKlansman is based on an Incredible True Story. Who knew? - 16th January 2019
- Why the wall? - 15th January 2019