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Consumer Expenditure Survey

POF: Socioeconomic performance index for Brazil grows 12.8% between 2008 and 2018

Section: Social Statistics | Irene Gomes e Umberlândia Cabral | Design: Brisa Gil

June 23, 2023 10h00 AM | Last Updated: June 26, 2023 04h10 PM

  • Highlights

  • For the first time ever, the IBGE released the temporal comparison of two indexes that aim at measuring the quality of life of the Brazilian population: the Socioeconomic Performance Index (IDS) and the Loss of Quality of Life Index (IPQV). They were produced from the data of the last two editions of the Consumer Expenditure Survey (POF). The temporal analysis has an experimental nature, as it includes new statistics that are still being tested and are under assessment.
  • The Socioeconomic Performance Index (IDS) of Brazil grew 12.8% between 2008-2009 and 2017-2018, changing from 5.452 to 6.147. By including non-monetary acquisitions of services, collected only in the 2017-2018 edition, the IDS changes to 6.212.
  • Every Federation Unit increased, mostly in Roraima (32%) and Sergipe (25.8%) and less in Rio Grande do Sul (9.1%) and Rio de Janeiro (5.6%).
  • Considering non-monetary acquisitions of services in 2017-2018, the highest IDSs were registered in the Federal District (6.981) and São Paulo (6.878), and the lowest ones in Maranhão (4.909) and Pará (5.108).
  • In 2017-2018, Education and Access to financial services and standard of living were the most important categories for the total marginal effects on the IDS for Brazil, with percentages around 19%. Housing represented 16.1% and Access to public utility services and Health and food represented nearly 14% of the total marginal effects noticed in the IDS result. The marginal effects indicate how a category negatively impacts the growth of the index.
  • Between POF 2008-2009 and its most recent edition (2017-2018), the loss of quality of life of the population fell from 0.227 to 0.157 in the period of nearly ten years, measured by the IPQV. The lower the index, the smaller the loss of quality of life. In the period under analysis, the IPQV retracted nearly 30%.
  • In the IPQV based on the last edition of POF, the index was 0.183 when the household head was either a black or brown person, whereas it was 0.122 when they were white persons. Other inequalities were noticed in families with children and also taking into account sex, level of schooling and earnings of the household head.
Roraima was the state with the best socioeconomic performance, with an advance of 32.0% in the IDS in nearly ten years - Picture: Boa Vista City Hall

The IBGE released today (23) an updating of the indicators that measure the quality of life of the Brazilian population. The two indexes were released for the first time in 2021, with data from the last edition of the Consumer Expenditure Survey (POF) 2017-2018. Now, the calculations were extended to the information from the previous edition of the survey (2008-2009). While the Socio-Economic Performance Index (IDS) assesses the socioeconomic progress from income, the Loss of Quality of Life Index (IPQV) pinpoints the deprivations that people face.

Losses, measured by the IPQV, reflect the difficulties faced by families to fully transform their resources and good and service acquisitions into quality of life.  This index reaches themes like welfare, inequality, social exclusion and poverty, and brings several divisions, according to the characteristics of the household heads (color or race, sex, age and income). According to the study, the characteristics of families, aspects of the society and places where they live are among the major factors that affect such conversion.

The indicators were created based on nine themes: income, housing, access to public utility services, health, education, access to financial services and standard of living, food, transportation and leisure, and travel. Some characteristics that were taken into account to pinpoint losses were the lack of bathrooms in the household, little space at home and assessment of the family´s leisure.

“Based on indicators of each dimension, it is possible to calculate the losses that each person has [in their quality of life], such as having a leisure considered poor or spending too much time in transportations,” explains Leonardo Oliveira, an analyst of the survey. The loss function of each person is estimated based on this calculation and on the total elements.

IDS increases in Brazil and in every Federation Unit

From 2008-2009 to 2017-2018, both Brazil and every Federation Unit increased the quality of life and welfare, measured by the Socioeconomic Performance Index (IDS), which changed from 5.452 to 6.147, a variation of 12.8%. By including non-monetary acquisitions of services, collected only in the 2017-2018 edition, the IDS changes to 6.212.

“The Socioeconomic Performance Index is the result of the amount of resources produced by a society and the loss of quality of life that it faces in a certain period. Such index allows to compare different FUs in a common metrics that discounts the loss pointed out by the IPQV from the economic progress,” explains Oliveira.

The biggest increases in the IDS occurred in Roraima (32%) and Sergipe (25.8%), where the per capita household disposable income  (RDFPC) is lower than the national average, whereas Rio Grande do Sul (9.1%) and Rio de Janeiro (5.6%) recorded the smallest increases.

The analyst explains that for the IDS of states with very high income, small increases in the IPQV might cancel the benefits produced by the growth of income. On the other hand, by recording a real increase in the RDFPC and/or an improvement in the IPQV, areas with lower income manage to have a more significant impact on the IDS.

“Even in areas with higher RDFPC and with a high availability of hospitals, basic sanitation, good network of public transportation, etc., it is important to maintain and improve these services for the IDS to evolve,” notes him.

The Federal District reported the highest IDS value in 2017-2018: 6.923 against 5.969 in the previous period, a rise of 16.0%, surpassing São Paulo, which peaked in 2008-2009. The growth of the IDS in São Paulo was 10.3% in the period.

Roraima registered the best performance, with an increase of 32.0% in the IDS. It should be highlighted that that state was the one that most significantly reduced the IPQV (-47.0%), coupled with the highest increase in the RDFPC, 70% (from R$674.65 to R$1,148.39). “This shows that beyond the improvement in the economic performance from a gain in the income, the population advanced in the quality of life in multiple non-monetary dimensions,” analyzes Oliveira.

Rio de Janeiro is on the opposite side, since it was the FU with the smallest increase in the IDS in the period (5.6%). That state recorded the smallest increase in the real income in the period, only 3.1% (from R$1,645.97 to R$1,696.88), and the smallest drop in the IPQV (-22.2%). Although they grew their respective IDSs (18.3% and 16.8%), Maranhão and Pará remained the lowest ones in Brazil (4.841 and 5.067, respectively).

Non-monetary services impact more on quality of life where IDS is lower

Observing the IDS values taking into account non-monetary acquisitions of services, only nine out of 27 Federation Units registered a result above that recorded for Brazil (6.212), including the entire Southeast and South regions. The Federal District (6.981) and São Paulo (6.878) were the ones that reported the highest values. Maranhão (4.909) and Pará (5.108), the lowest ones.

“By comparing the IDSs with and without non-monetary acquisitions, we observe that those acquisitions were more important in the states of the Northeast Region, Minas Gerais, Mato Grosso do Sul and Rondônia,” stresses the analyst.

Education and Access to financial services and standard of living mostly impacted the IDS

It is possible to analyze how changes in each aspect of the quality of life (Housing, Public utility services, Health and food, Education, Access to financial services and standard of living, Transportation and leisure) impacted the result of the IDS by means of the observation of their contributions to the total marginal effects they cause. The marginal effect measures the impact or importance of the dimension. Therefore, the losses of quality impact more negatively the IDS in the dimensions with bigger contributions.

In 2017-2018, Education and Access to financial services and standard of living were the most important categories for the total marginal effects on the IDS for Brazil, with percentages around 19%. Housing represented 16.1% and Access to public utility services and Health and food represented nearly 14% of the total marginal effects noticed in the IDS result.

“Whenever the contribution of each dimension is more balanced, the welfare of that society occurs in a more balanced way. Every dimension shows a significant percentage, which requires strategic actions integrated and planned in different areas to fight the losses in the quality of life,” assesses Oliveira.

In Maranhão, the state with the lowest IDS in 2017-1028, the biggest contribution came from Access to financial services and standard of living (19.1%) and the smallest one, from Transportation and leisure (14.4%).

In the Federal District, the highest IDS among the FUs, the Transportation and leisure dimension registered the biggest contribution for the total marginal effects (22.3%). Health and food also stood out, as its contribution of 17.8% was the biggest in this dimension among the states.

“Another interesting aspect about the FD is that major differences were not noticed among the impacts of the other dimension on the IDS result. Therefore, the highest IDS in Brazil is based on a balance among the dimensions that comprise the quality of life of the population,” concludes Oliveira.

Loss of quality of life was bigger in families in which the household head was a black or brown person

Between POF 2008-2009 and its most recent edition (2017-2018), the loss of quality of life of the population fell from 0.227 to 0.157 in the period of nearly ten years. It represents a retraction of nearly 30%. The index (IPQV) ranges from 0 to 1: the closer to 0, the smaller the loss of quality of life.

In the analysis by color or race of household heads, the survey observed inequalities in the loss of quality of life among the groups under analysis. In the two editions of the survey, the IPQV was higher for households in which the household head was either a black or brown person, i.e., more deprivation of elements that ensure a better quality of life for these groups.

In POF 2017-2018, the IPQV was 0.183 when the household head was either a black or brown person, whereas it was 0.122 when they were white persons. Every group reduced against POF 2008-2009. Nevertheless, the contribution for the IPQV for Brazil as a whole was distinctive, since the population that lived in families in which the household head was either a black or brown person accounted for more than 60% of the restrictions for the country. The contribution for the total IPQV of a country is influenced by the proportion of the population, as well as by the losses registered by a certain group.

Whenever the household head was a woman, the IPQV was higher in both editions of the survey. Like color or race, loss of quality of life reduced its value between nearly ten years. In this period, the number of families in which the household head was a woman increased and, thus, the contribution of this population to the IPQV changed from 28.2% to 43%. As families with a man as the household head were the majority in Brazil, this group contributed with more than 50% of the value of the total IPQV.

The survey also pointed out that the losses in quality of life drop as the age of the household head increases. In families in which the household head was aged 65 years or over, the values for the IPQV were lower than those of the other age groups.

Between the two periods of the survey (2008-2009 and 2017-2018), the IPQV values reduced in every age group. In the 2008-2009 edition, the IPQV was 0.247 for persons who lived in families with a household head up to 24 years of age. Among families with a household head with at least 65 years of age, the index was 0.217. The difference among the groups was reduced nearly ten years after: the values were 0.167 and 0.155 in the 2017-2018 edition, respectively.

The index also measured the loss in quality of life whenever children are present in the family. In both editions of the survey, the IPQV was higher whenever a family comprised more than one adult with at least one child. In this case, the value stood above that estimated for the entire country.

As it concentrated most of the population, this type of family arrangement was the one that most contributed for the total losses in Brazil in relation to the other groups analyzed. The second biggest contribution was of the family comprising more than one adult without any children, being nearly 20.0% with data from POF 2008-2009 and approximately 25% with the data from the last survey.

Loss in quality of life is associated with level of schooling as well

Another observation of the survey is that the higher the level of schooling of the household head, the smaller the losses represented by the indicator. Whenever the household head had no education, the IPQV calculated was 0.253, higher than the value observed for the entire country (0.157). On the other hand, whenever the household head had complete higher education, that value was 0.074, quite lower than the national reference value, based on POF 2017-2018 data.

Despite the reduction in the values of losses for every group in the division by level of schooling when compared with the previous edition, the inequality between them remained.

Concerning the insertion in the labor market, more than half of the value of the IPQV was concentrated on families whose household head was self-employed, was out of the workforce, was not working nor searching for a job in the labor market or other cases (unemployed or employed assisting a member of the same household). In this case, the bigger contingent of those populations in the entire country influenced as well.

The index calculated for self-employed workers was 0.177, whereas this value was 0.173 whenever the household head was out of the workforce and other cases, according to the results based on POF 2017-2018. In those groups, the values were higher than those observed for the index that takes into account the losses of the entire Brazilian population.

Still in this division, the biggest losses in quality of life were recorded for persons who lived in households in which the household head was a domestic worker (0.201). The values for that group reduced between the two editions of the survey.

The analysis of income showed differences as well. Considering the RDFPC, the values of losses decreased as the income increases. Nearly half of the persons concentrated up to the fifth tenth of income, i.e., those who earned less, represented nearly two thirds of the losses calculated for Brazil.

Considering the results of POF 2017-2018, while the IPQV result for the first tenth of income was 0.264, the value for the last tenth was 0.061. The survey also calculated a ration between the two extremes and observed that the value of losses of quality of life for the first tenth of the RDFPC was at least four time the value of the highest-income tenth.

The analyst compares these data to those of the 2008-2009 edition. “In the period, every income tenth improved the quality of life, as long as the losses reduce. Although the losses remain concentrated in the first two tenths,” states Oliveira.

Loss in quality of life is bigger in North, Northeast and rural areas in Brazil

Between the two last POF editions, the IPQV calculated for the urban area changed from 0.205 to 0.142 and, in the case of the rural area, from 0.337 to 0.244. The population that lived in the urban area contributed with nearly 75% of the national IPQV. Although nearly 15% were concentrated in the Brazilian rural area, that group represented 25% of the losses, i.e., a value quite above the representation of the contingent in th total population.

Among the Major Regions, the North (0.223) and the Northeast (0.207) showed the biggest losses, above the national IPQV. While the South (0.114) and the Southeast (0.126) reported values below the national average, the Central-West (0.158) registered an IPQV very close to that of the country (0.157).

The survey also calculated the importance of each dimension assessed in the composition of the IPQV. To do this, the value of the index was measured as if there were no losses of quality in each one of the dimensions individually analyzed. The difference between the IPQV and the same index recalculated without the losses of one dimension is called marginal effect.

Based on the 2017-2018 data, it was noticed that the marginal effects have values close to the scenario in which all the dimensions would have the same contribution (1/6 or 16.7%). That means that even if the health and food dimension had a lower share than education, no dimensions assessed individually accounted for a bigger loss in the quality of life of persons, i.e., these restrictions have a multidimensional origin.

In the comparisons between the two periods, the Housing and Transportation and leisure dimensions were those that showed the biggest differences in relation to the marginal effects. In the period between the two editions of the survey, the Housing dimension increased its parcel on the sum of the marginal effects from 9.2% to 16.0%, though, in absolute terms, these effects remained virtually stable. That happened because the change in the other dimensions changed the relative contribution of Housing, like the Transportation and leisure theme, which fell from 24.4% to 17.3%.

More about the survey

The Consumer Expenditure Survey provide information on the household budget composition, living conditions and the nutrition profile of the population. Continuing the series of studies to asses the quality of life in Brazil, this publication brings a temporal analysis of this theme, based on the calculation of the Loss of Quality of Life Index (IPQV) and the Socioeconomic Performance Index (IDS) related to the 2008-2009 and 2017-2018 editions.



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