Analysis of the determinants of industrial performance: the case of beauty and personal care segment in Brazil in the period 2001-2013

Abstract

During the period 2001-2013, the segment of Beauty and Personal Care (B&PC) was one of the most dynamic segments of the Brazilian economy. The B&PC sector was characterized by an average real growth level close to 10% per year, exceeding the average growth of the Brazilian industry in general (2.2% per year) and the average GDP growth (3.0% per year) during the same period. In face of this extraordinary performance, we investigate the macroeconomic and demographic determinants of the expansion of the B&PC sector in Brazil. To do so, we estimate panel data regressions considering the annual sales of a specific set of B&PC products. The conclusion is that the most important economic variables to explain sales are the inflation rate and the interest rate, in combination with the income level of households and the level of unemployment.