Representative Earnings Research in the Loss of Earnings field

Since Analytico’s publication in the Koch Quantum Yearbook (that is published and used widely by experts in the field), Analytico, a 21st Century company, has had numerous requests about our research in the Loss of Earnings field. This article will provide an overview of our research.

Loss of Earnings Experts

Analytico, a 21st Century company, consists of a multi-disciplinary team with experience in the field of Industrial Psychology, Quantitative Analysis and Economics. Using statistical modelling, underpinned by economic and career-related theories, Analytico provides research, reporting, and testimony on loss of earnings and loss of support-related claims. Our aim is to conduct earnings research on a bespoke and profile-specific level to assist attorneys and experts to make accurate earnings projections.

Since our inception, we have been published in various media articles and radio interviews, explaining earnings trends in South Africa. We also presented at a nationally televised high-level parliamentary committee panel, as our research addresses and influences key legislation. Examples of links to these publications are as follows:

Our earnings expert approach

Due to our goal to maintain objective and personalised earnings research, we set out to develop a model to produce earnings projections based on demographic parameters. Our solution was to develop a model for which certain demographic parameters can be selected to form a subset of the larger database. For the demographic of interest, the percentiles are plotted. For example, our research can consider a combination of variables that include:

  • Industry
  • Occupation (based on the International Labour Organisations Framework)
  • Sector
  • Education
  • Province
  • Gender
  • Race
  • Age
  • Education Field
  • Disabilities
  • Employed/Self-employed

Furthermore, we can report on generalised demographics, such as what employees with a grade 12 earn in South Africa, or report on what Gardeners with a Grade 12 in the Western Cape earn. This flexibility enables our clients to make earnings projections on vague or very specific matters.

Given the nature of the modeling, Analytico required a massive amount of data. We conducted our due diligence to try and obtain various datasets. Statistics South Africa was the only credible institution capable of providing Analytico with a sufficient amount of data to analyse.

The dataset

Analytico utilised the Census 2011 (Revised 2015) sample data to construct the earnings tables for our earnings reports. We advocate the use of the Census 2011 data due to the dataset size and ability to construct granular earnings projections based on specific demographics.

Why we use the Census

A population census is a total count of the country’s population, where a variety of demographic, social and economic information is gathered about the people who live in the country. In other words, counting all the people in the country and collecting information about them (e.g. their age, education level, housing conditions, and employment). The aim of a census is to provide government, the private sector, and academic and research institutions with information that is essential for policy development, planning, monitoring, and evaluation of development projects and informed decision-making.

Final Words

Many court judgments refer to the difficulties Earnings Experts need to deal with, and it is often referred to as “soothsaying” or “looking into a crystal ball”. Our model and research are specifically developed for earnings projections and give far greater and more granular insight into earnings statistics than salary surveys. This is not to reduce the validity of salary surveys, however, they were simply not developed for the application of projecting a claimant’s earnings. I believe everything possible should be done to provide claimants with reasonable, fair, and accurate compensation for their losses. Professionals working in the Road Accident Fund should note and take serious consideration that it is an insurance sector and not a medical sector in which they operate. In all insurance-related fields, experts and analysts carry the heavy burden to ensure that claims are not under or over quantified and that immense effort should be expended to be certain claims are accurately quantified. Should this not occur, experts may find themselves contributing to the wasteful expenditure of public revenue.

Written by:

Jaen Beelders
Senior Analytics Advisor
[email protected]

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