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Brazil Criteria. Calculation and advantages.

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The Brazil criteria aims to assess the purchasing power of Brazilian classes and was created from the need for companies to segment products and services according to the population's purchasing power. Since social classes are classified according to family income, economic classes are classified by the purchasing power they have.

The economic classes segmented by the Brazil criteria are classified into A, B1, B2, C1, C2, and D-E, with A being families with the highest purchasing power and D-E those with the lowest purchasing power.

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What is Brazil Criteria?

The Brazil Criteria is an economic classification system developed by ABEP – Brazilian Association of Research Companies, widely used in market, media, and public opinion research.

The current methodology has been in effect since 2015. The model is based on the IBGE's Household Budget Survey (POF) and described in the work Socioeconomic Stratification and Consumption in Brazil, by professors Wagner Kamakura and José Afonso Mazzon.

The Brazil Criteria does not use income as the main variable, as declared income shows high statistical variability and overlap between classes. Income is disclosed only as a contextual estimate.

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Brazil Criteria Structure

The scoring system considers:

Possession of goods in the household:

  • Bathrooms

  • Private use automobiles

  • Motorcycles

  • Microcomputers (desktop, notebook, laptop)

  • Refrigerator

  • Freezer

  • Washing machine (automatic or semi-automatic)

  • Clothes dryer

  • Dishwasher

  • Microwave

  • DVD (or devices that play DVD)

  • Monthly domestic workers

Head of household's education level:

  • Illiterate / Incomplete Elementary School I

  • Complete Elementary School I / Incomplete Elementary School II

  • Complete Elementary School II / Incomplete High School

  • Complete High School / Incomplete Higher Education

  • Complete Higher Education

Access to public services:

  • Piped water

  • Paved street

Each item has a specific score and the total sum defines the economic class.

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Economic Classes

Based on the total score, families are classified into different economic classes, which are generally represented by the letters A, B, C, D, and E. Each of these classes reflects an income level and standard of living:

  • Class A: Represents the economic elite, with a high standard of living and access to a wide range of goods and services.
  • Class B: Includes upper-middle-class families, with a good level of comfort and access to various durable goods.
  • Class C: Known as the new middle class, this class comprises families with moderate access to goods and services, representing a significant portion of the Brazilian population.
  • Class D: Comprises low-income families, with limited access to durable goods and services.
  • Class E: Represents the most deprived population, with little or no possession of durable goods and restricted access to basic services.

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Applications of the Brazil Criteria

The Brazil Criteria is widely used in several areas, including:

  • Market Research: Companies and institutions use the criteria to segment the market and understand consumer behavior in different economic classes.
  • Public Policy Planning: Governments and NGOs use the data to develop programs and policies that meet the specific needs of each economic class.
  • Academic Studies: Researchers use the criteria to analyze socioeconomic trends and study social mobility in Brazil.

Although widely used, the Brazil Criteria is not without criticism. Some experts argue that the criteria may not adequately capture all the nuances of Brazilian families' economic conditions. Furthermore, rapid technological evolution and changes in consumption may render some items obsolete or less relevant.

The Brazil Criteria is a valuable tool for economic segmentation and the analysis of the socioeconomic conditions of the Brazilian population. Despite the criticisms, it remains an important reference for companies, governments, and researchers. With periodic revisions and adaptations, the criteria maintains its relevance in a constantly changing economic scenario.

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How to calculate the Brazil criteria?

To calculate a family's economic class using the Brazil Criteria, it is necessary to follow some specific steps that involve scoring the family's possessions, the head of household's education level, and the presence of a domestic worker. Below, we detail each of these steps:

1. Collect Information

First, you need to collect information about the following items:

  • Durable Goods: Number of televisions, DVD/Blu-ray players, radios, automobiles, computers, washing machines, refrigerators, and microwaves.
  • Head of Household's Education Level: The head of household's schooling level.
  • Presence of Domestic Worker: If the family has a monthly domestic worker.

2. Assign Scores

Each item has a specific score according to the Brazil Criteria. Below, I present a simplified table with examples of scores (these scores may vary according to ABEP updates):

Durable Goods

Item 0 1 2 3 4 or +
Bathrooms 0 3 7 10 14
Monthly domestic workers 0 3 7 10 13
Automobiles (private use) 0 3 5 8 11
Microcomputer (desktop/notebook/laptop) 0 3 6 8 11
Dishwasher 0 3 6 6 6
Refrigerator 0 2 3 5 5
Freezer (independent or duplex) 0 2 4 6 6
Washing machine (automatic/semi-automatic) 0 2 4 6 6
DVD or device that reads DVD 0 1 3 4 6
Microwave 0 2 4 4 4
Motorcycle (personal or mixed use) 0 1 3 3 3
Clothes dryer (includes washer and dryer) 0 2 2 2 2

Head of Household's Education Level

Education Level Score
Illiterate / Incomplete Elementary School I 0
Complete Elementary School I / Incomplete Elementary School II 1
Complete Elementary School II / Incomplete High School 2
Complete High School / Incomplete Higher Education 4
Complete Higher Education 7

 Access to Public Services

Service No Yes
Piped water 0 4
Paved street 0 2

 

3. Calculate the Total Score

After collecting all household information, the next step is to sum the scores assigned to each item. At this point, it is important to consider all elements evaluated by the current Brazil Criteria.

First, sum the score referring to household goods and items, such as automobiles, computers, bathrooms, appliances, and other items provided in the methodology. Then, add the score corresponding to the head of household's education level. Finally, include the score referring to the number of monthly domestic workers, if any, in addition to access to public services, such as piped water and paved street.

The sum of these factors will result in the household's total score, which will serve as the basis for economic classification.

4. Determine the Economic Class

With the final score in hand, classify the household according to the updated Brazil Criteria cutoffs. Currently, the classification occurs as follows:

Total Score Economic Class
45 – 100 A
38 – 44 B1
29 – 37 B2
23 – 28 C1
17 – 22 C2
0 – 16 DE

Thus, the higher the score obtained, the greater the household's purchasing power tends to be.

Calculation Example

To facilitate understanding, see a practical example using the current methodology.

Information collected

  • 1 private car

  • 1 personal computer

  • 1 washing machine

  • 1 refrigerator with freezer

  • 1 microwave

  • 1 bathroom

  • Head of household's education level: complete high school

  • No live-in domestic worker

  • Household with piped water and paved street

Score

  • Car: 3 points

  • Personal computer: 3 points

  • Washing machine: 2 points

  • Refrigerator: 2 points

  • Freezer: 2 points

  • Microwave: 2 points

  • Bathroom: 3 points

  • Education level (complete high school): 4 points

  • Domestic worker: 0 point

  • Piped water: 4 points

  • Paved street: 2 points

Total score

3 + 3 + 2 + 2 + 2 + 2 + 3 + 4 + 0 + 4 + 2 = 27 points

Economic class

In this case, the household falls into Class C1, according to the current Critério Brasil cutoffs.

This example demonstrates, in practice, how Critério Brasil allows for the economic classification of households in a standardized and comparable way. Even so, it is essential to always use the most recent version of ABEP's methodology, ensuring accuracy in studies and consistency in the analysis of socioeconomic data.

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Advantages and where to use it?

The methodology and structure of the Critério Brasil survey are super effective and practical when the intention is to conduct a socioeconomic study, and companies know this. Therefore, many companies conduct continuous studies through research panels to stay updated with the economic and social changes in the population.

ABEP's Critério Brasil survey is conducted annually and is already used by companies as a way to have a general and more precise overview of the population's socioeconomic power. In fact, companies have the possibility to evaluate the effectiveness of using Critério Brasil and generate improvements for the study through constructive criticism.

Critério Brasil offers several advantages, making it a valuable tool for different areas:

1. Simplicity and Clarity

Critério Brasil is relatively simple to apply, as it is based on a direct questionnaire about the possession of durable goods and education level. This facilitates its implementation in market research and socioeconomic studies.

2. Updated Relevance

ABEP periodically revises Critério Brasil to reflect changes in the socioeconomic conditions and lifestyle of Brazilian families. This ensures that the criterion remains relevant and accurate.

3. Ease of Comparison

The standardization of Critério Brasil allows for the comparison of data over time and across different regions of the country. This is essential for identifying trends and changes in socioeconomic conditions.

4. Efficient Segmentation

Companies and organizations can segment the population efficiently, allowing for more targeted and effective marketing campaigns and public policies.

5. Data Accessibility

Critério Brasil uses data that is relatively easy to obtain, such as the possession of durable goods and education level. This reduces the cost and time required to collect information.

6. Broad Application

It can be used by a variety of sectors, including private companies, governments, NGOs, and academic researchers.

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Where to Use Critério Brasil

Critério Brasil, being a tool used in Brazil to classify the population into different socioeconomic classes based on criteria such as possession of goods, head of household's education, and access to public services, is frequently used in various areas, including:

1. Market Research

Market research companies use Critério Brasil to segment consumers and better understand their consumption habits, preferences, and needs. This helps companies develop products and services that are more suitable for different segments of the population.

2. Marketing and Advertising

Advertising and marketing agencies use Critério Brasil to create more targeted and effective campaigns. By understanding the economic class of the target audience, campaigns can be adjusted to better resonate with the needs and desires of consumers.

3. Public Policy Planning

Governments and NGOs use Critério Brasil to identify vulnerable populations and develop more effective public policies and social programs. This includes resource allocation, development of assistance programs, and evaluation of the impact of implemented policies.

4. Socioeconomic Analysis

Academic researchers use Critério Brasil to study income distribution, social inequality, social mobility, and other socioeconomic phenomena. This helps to better understand the social and economic dynamics of the country.

5. Real Estate Sector

Real estate companies use Critério Brasil to assess the market potential of different regions and develop sales and marketing strategies for new developments.

6. Education

Educational institutions use Critério Brasil to better understand the socioeconomic profile of their students and their families, allowing for the implementation of more appropriate inclusion and support policies.

7. Health

Public and private health organizations use Critério Brasil to identify population groups with greater need for health services and develop more effective intervention programs.

Critério Brasil is a valuable and versatile tool, capable of providing important insights for various areas. Its simplicity, relevance, and segmentation capability make it essential for companies, governments, NGOs, and researchers seeking to understand and act upon the complex socioeconomic reality of Brazil.

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The use of the Critério Brasil survey provides companies with:

  • Socioeconomic study of the current market – Surely, understanding the Brazilian socioeconomic scenario is the main objective of the Critério Brasil survey. This data provides companies with the possibility to monitor the entire current socioeconomic scenario, which is one of the most necessary and constant studies in the market.
  • Study on products and services with higher consumption – The Critério Brasil study also helps to map the products and services with higher consumption in the country. This data alerts to changes in social purchasing power for the purchase of new products and contracting of services that were previously used only by other socioeconomic classes. In this way, companies can pivot their businesses to take advantage of new potential audiences, since these people already have sufficient purchasing power to own such a product or service.
  • Study on opportunities in the educational area – Knowing the educational scenario of the population directly influences the creation of campaigns and the maintenance of the brand's image and values. It also helps to understand how much each class invests in studies and how accessible education is to them, detecting threats and opportunities in the market. The use of Critério Brasil is fundamental in these projects.
  • Easy data interpretation – As it is a quantitative survey, the results are calculated automatically, and with PAINEL TAP you can monitor the survey data in real time. Once the survey is finished, the data is obtained through numbers that can be presented in various ways, such as in graphs. In addition, with PAINEL TAP you share your online survey in a super easy and practical way, with results following the Critério Brasil.
  • Economy in data elaboration, development, and analysis – Since Critério Brasil is done through our online research panels, companies can continue producing in other areas and studies, as here at PAINEL TAP the survey construction is our responsibility. We work 100% with updated panels and maintaining the health of the online panel is very important to us. The respondent panel has over 19 million registered and monthly verified people, which means more responses and more effectiveness in them.

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