Population Growth in Global Markets

Abstract

The fourth chapter discusses the growth of population over time and the influence of population growth on disposable income in the context of geographical regions of the world and stages of development. It reviews population growth over time and recent trends in it. It introduces the concept of the demographic transition. It examines its influence on population growth in countries at different stages of the transition and the impact and clustering of the world’s populations with different growth rates. Further, it examines hypotheses regarding future growth of populations in different world markets and its implications regarding the future population of countries at different stages of development. It examines the inevitable ageing of global markets over time. It also looks at hypothesised population futures and possible implications for future consumer behaviour in markets in different stages of the demographic transition and population ageing.

Appendix: Population Growth Rates Estimation – Example

The world’s population was estimated by the United Nations to have grown from 2,529 millions in 1950 to 6,512 millions in 2005 (UN, 2009).

Following the equation and notation in Box 4.1,

$$\bar g = \Big[\sqrt[n]{{\big(P_{t + n} /}}P_t\big) \Big] - 1$$

• $P_{t + n} = 6{,}512{\textrm{ million}}$

• $P_t = 2{,}529{\textrm{ million}}$

• $n = 2005{-}1950 = 55$

Accordingly, the average yearly rate of population growth over the 55-year period was

• $\bar g = \Big[\sqrt[{55}]{{\big(6,512/}}2,529\big)\Big] - 1$

• $\overline g = \left[\sqrt[{55}]{{2.57493}}\right] - 1$

• log $\overline g {\textrm{ }} = \left(1/55{\textrm{ }}\log 2.57493\right) - 1 = \left(1/55^*0.410765\right) - 1\newline = \left({\textrm{anti}}\log 0.007468\right) - 1$

• $\overline g = 1.0173 - 1 = {{\textbf{0.0173\, or\, 1.73}}}\,\%$ per year

Or using the alternative

• $r = (P_n /P_0)/n$

• $P_{t + n} = 6{,}512{\textrm{ million}}$

• $P_t = 2{,}529{\textrm{ million}}$

• $n = 2005-1950=55$

• $r = \ln\, (6{,}512/2{,}529)/n$

• $r = \ln 2.57493/55$

• r = 0.94582/55 = 0.0173 or 1.73% per year

Note: (log) is the logarithm of base 10. (ln) is the natural logarithm of base e = 2.7182818… . and ln of e = 1.

Caution is required in the estimation and use of these population growth rates. The number of decimals either in the estimation of the rate or the number of decimals in the rate used in any extrapolation may make a substantial difference to the results obtained.