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There has been a lot of talk in the industry regarding the relevance of LSMs (Living Standard Measure), its misrepresentation of the South African landscape, its racist bias and other inaccuracies that it portrays.
The new SEM (Socio-Economic Measure) household continuum developed by Neil Higgs and his team at Kantar TNS, is not dependent solely on durables, and is being touted as a more accurate reflection of South African society in terms of how people live.
“SEMs speak to how South Africans live and not what they have. This household continuum is a statistically-beautiful and technically-elegant solution,” says Peter Storrar, Kantar TNS lead on the ES Survey conducted for the industry and 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, which means the country has a very unequal income distribution with many haves and the have-nots.
“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 our Gini coefficient is still incredibly high.”
The LSM shows that only 6%, or one in 17 houses, is in the bottom LSM 1-3 group, while the SEM shows that 44%, or one in 2,3 households is struggling. In terms of the LSM 8-10 group, the SEM also outperforms the LSM with 19% of household’s versus 14% for the LSM.
In terms of practicality, the SEM also has numerous advantages over the LSM. With 14 variables, versus the 29 on LSM, 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 rooms.
The LSM will be run in parallel with the SEM for a period of two years until 2018.