Brazilians could have seven social classes.

247 - In the book "Socioeconomic Stratification and Consumption in Brazil," launched yesterday at the Livraria da Vila bookstore in the JK Shopping Mall in São Paulo, authored by professors Wagner A. Kamakura (Rice University) and José Afonso Mazzon (FEA-USP), Brazilians are classified into seven social classes, ranging from class 1, the very rich, to class 7, those who are "poor" or "very poor."

The study will be used for market and audience segmentation purposes and was developed in close collaboration with the Brazilian Association of Research Companies (ABEP), which will begin using the model as the new "Brazil Criterion" starting January 1, 2014.

Among the main differences between the Kamakura and Mazzon model and the criterion currently used are the interference of several factors in the income factor. These include whether the income is permanent or not, information about family composition, the size of the municipalities and the region where they are located, which will serve as parameters for segmentation and comparison between the consumption patterns of Brazilians.

The new "Brazil Criterion" takes into account data from the 62 households evaluated by the IBGE's Family Budget Survey throughout the country.

The current indicator covers only nine major metropolitan regions (Porto Alegre, Curitiba, São Paulo, Rio de Janeiro, Belo Horizonte, Federal District, Salvador, Recife, and Fortaleza), using the same sample as the Ibope socioeconomic survey, which includes 11 households.

The new proposal increases the number of Brazilians in the group considered poor and extremely poor, a segment of the population currently called class E. There is a jump from 13,94 million Brazilians (7,3%) to 29,6 million (15,5%), while the current class D decreases from 62,6 million people (32,9%) to 42,9 million (22,5%).

The Abep criteria are already used by companies and advertising agencies to formulate their strategies.

To develop the new model, the authors propose the concept of "permanent income," which would be more important than "current income"—which is fluctuating. This is because the population tries to maintain the same consumption pattern over time, even if it temporarily suffers a drastic change in current income.

In this scenario, the individual begins to use savings, loans, or other investments to maintain the same standard of living. In the current classification used by the Secretariat of Strategic Affairs (SAE), the criterion is "current income".

Another change is the differentiation of social classes across Brazilian territory. This is adjusted by family composition and geography (geographic region and location of residence).

"This system is innovative. No official socioeconomic classification criterion in the world uses region and place of residence, nor does it correct for family composition. A family with an income of R$ 2.000 in São Paulo will face great challenges to support themselves, while this amount in the interior of the Amazon already provides a certain level of comfort," Mazzon told the newspaper O Globo.

In total, 35 variables are considered: geographic, demographic, and cultural in nature, in addition to the acquisition of goods, items, and access to essential services for domestic comfort and the public network. Data from the Family Budget Survey (POF) were also used in the project.

In the current model, there is a large dispersion when the criterion analyzed within the same social class is income.

At the top of the Brazilian pyramid (A1), where the average income is R$ 12, there are families with a total income of R$ 9.000 per month up to those who receive more than R$ 1 million.

When a researcher asks about income, it's purely for statistical purposes. In reality, governments, businesses, and other institutions take into much greater consideration the quantity of assets, level of education, and access to services when classifying an individual into a particular social stratum.

"There's not much of a way out when you analyze it from an income perspective. These distortions will occur. That's why the new middle class, for example, is classified as middle class, but its effective income is very low," analyzes Fernando de Holanda Barbosa Filho, professor of economics at the Getulio Vargas Foundation (FGV).