The Living Standards Measure or LSM is a marketing and research tool ( same as social economic class: SEC but more refine ) used in

South Africa South Africa, officially the Republic of South Africa (RSA), is the southernmost country in Africa. It is bounded to the south by of coastline that stretch along the South Atlantic and Indian Oceans; to the north by the neighbouring count ...

to classify

standard of living Standard of living is the level of income, comforts and services available, generally applied to a society or location, rather than to an individual. Standard of living is relevant because it is considered to contribute to an individual's quality ...

and

disposable income Disposable income is total personal income minus current income taxes. In national accounts definitions, personal income minus personal current taxes equals disposable personal income. Subtracting personal outlays (which includes the major ...

. It segments the population into ten

decile In descriptive statistics, a decile is any of the nine values that divide the sorted data into ten equal parts, so that each part represents 1/10 of the sample or population. A decile is one possible form of a quantile; others include the quartil ...

s based on their relative means, with LSM 1 being the decile with the least means and 10 being the decile with the greatest means. It does this by ranking people based on ownership of the components of a standard basket of goods (which varies over time). For instance, those people who owned a television set would rank higher in the LSM than those who did not. In effect, the LSM is an income inequality metric, despite specifically excluding income as one of the tested metric. Its components are reflective of the fact that South Africa has a high Gini coefficient.

Current variables

The current (2015) basket of variables used to calculate LSM is: * Metropolitan dweller (250 000+) * Living in a non-urban area * House / cluster house / town house * Tap water in house / on plot * Flush toilet inside house * Hot running water * Built in kitchen sink * No

domestic worker A domestic worker or domestic servant is a person who works within the scope of a residence. The term "domestic service" applies to the equivalent occupational category. In traditional English contexts, such a person was said to be "in service ...

s or gardeners * Home security service * 2 cellphones in household * 3 or more cellphones in household * Zero or one radio set in household * Air conditioner (excl. fans) * Television set(s) * Swimming pool * DVD player / Blu Ray player * Refrigerator or combined fridge/freezer * Electric stove * Microwave oven * Deep freezer – free standing * Washing machine * Tumble dryer * Dishwasher * PayTV (M-net / DSTV / TopTV) subscription * Home theatre system * Vacuum cleaner * Motor vehicle in household * Computer – desktop / laptop * Land line telephone (excl. cellphone)

References

External links

LSM Calculator
Market segmentation Standard of living Income inequality metrics {{income-stub