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PRESENTS

PRESENTS. Population. Problematic. Pitfalls. Say that fast three times!!!. 1. Problematic Population Pitfalls. 2. Problematic Population Pitfalls. 3. Problematic Population Pitfalls. 1. Modeling is only as good as input data. Objectives. 1. Modeling is only as good as input data.

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PRESENTS

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  1. PRESENTS

  2. Population Problematic Pitfalls Say that fast three times!!! 1. Problematic Population Pitfalls 2. Problematic Population Pitfalls 3. Problematic Population Pitfalls

  3. 1. Modeling is only as good as input data. Objectives 1. Modeling is only as good as input data. 2. Ideology of population growth. 3. Identification of population data sources. 4. Minimize the problems of potential pitfalls. 5. Q & A

  4. 1. Modeling is only as good as input data. GARBAGE IN, GARBAGE OUT!

  5. 1. Modeling is only as good as input data. What are the primary input components of the gravity model? Store Data a. Sales b. Size c. Location Population Data Population Data a. Population, including projected future years b. Per Capita Weekly Expenditure (PCW) c. Location (longitude/latitude of population centers)

  6. Accurate Modeling 1. Modeling is only as good as input data. • Bad Data in, Bad Projection out vs. • Good Data in, Good Projection out + Accurate Volumes + Accurate Population + Good Modeling Behavior = Accurate Projections Accurate Population

  7. 2. Ideology of population growth Objectives 1. Modeling is only as good as input data. 2. Ideology of population growth. 3. Identification of population data sources. 4. Minimize the problems of potential pitfalls. 5. Q & A

  8. 2. Ideology of population growth What is Population growth? Population growth is change in population over time But is it really that simple? How do we forecast future population?

  9. 2. Ideology of population growth In the past, all demographic information, including population estimates, were released once a year (typically in May or June). The method used to generate the annual estimates was a "top-down" approach, which started by calculating a national population estimate, then a state estimate, then a county, etc., until the calculations reach the local level. This national-to-local estimating process used by the U.S. Census Bureau, was adopted and subsequently enhanced by demographers to make population estimates at the block group level. However, this method has serious drawbacks for businesses that want to pinpoint the best new markets for opening new businesses. The top-down approach is used by the U.S. Census Bureau for research at the macro level and is, therefore, unsuitable for use at a micro level, like block groups, which are greatly influenced by singular events, like the opening of an apartment complex or a building demolition. To compensate for this significant shortcoming, demographers developed spreading techniques that broad-stroked areas of growth and decline at the sub-county level. While the broad-stroke market analyses of growth or decline are often accurate, this methodology also has a significant defect: It tends to mask specific, block-group-level areas of growth or decline, thereby, concealing hidden opportunities of market development. STI: PopViews

  10. 2. Ideology of population growth Top Down approach:

  11. 2. Ideology of population growth Bottom Up approach:

  12. World Statistics Fun Facts

  13. Population growth rate in percent, with the variables of births, deaths, immigration, and emigration, as listed on CIA factbook (2006 estimate).

  14. Evolution of population in different continents source: United Nations

  15. World Statistics

  16. National Statistics

  17. 3. Identification of population data sources. Objectives 1. Modeling is only as good as input data. 2. Ideology of population growth. 3. Identification of population data sources. 4. Minimize the problems of potential pitfalls. 5. Q & A

  18. 3. Identification of population data sources. Sources: Your own guestimates (of course perfect!) Boss’s dart board Limitations: Time – annual release of estimates – doesn’t show seasonality Top Down approach – can miss specific location events Bias – “That’s a great site!!!” (force the pop to show it) Inability to forecast 0 – 1000+ units in 1 year

  19. Current Population 3. Identification of population data sources. • Why is it important • Previously stated “key component” in accurate model • Know your trade area • Trends in the area • Large areas effected by external sources • Freeways, Airports, Natural Disasters • Contrary to some data sources people don’t live in Airports • (except us analysts) • Be your data source expert • How do they trend historical to get current • How much backfill do you need to do or check • What are the weak spots • Sanity Checks • Common Sense • Listen to the Model (Speakers not needed)

  20. 4. Minimize the problems of potential pitfalls Objectives 1. Modeling is only as good as input data. 2. Ideology of population growth. 3. Identification of population data sources. 4. Minimize the problems of potential pitfalls. 5. Q & A

  21. Projecting Population 4. Minimize the problems of potential pitfalls • Sources • Providers • Methods • Consultants / Specialists • 1st Time use, info can be confusing • Timing and Cost

  22. 4. Minimize the problems of potential pitfalls How do I know when to rely on vendor forecasts, and when will I have to get on the ground and do some primary research? Where the projection falls in the boundary…closer to the lower boundary may require less additional ground work, closer to the higher figure, may require more ground work. STI:PopViews Forecast Upper Boundary Forecast Forecast Population Growth Forecast Upper Boundary Forecast Lower Boundary Forecast Lower Boundary Time

  23. Forecasting On Your Own 4. Minimize the problems of potential pitfalls • Variables to consider • Types of units being built • Condo’s / Multi family • S/F Residential / Rental / Track Building • HH sizes • # of units per development • Build out history • In development • Surrounding area • Urban Renewal • Net new vs. Replacement • Uncontrollable Variables • Interest rates • Mother Nature

  24. 4. Minimize the problems of potential pitfalls XYZ Development - 2500 Total Units Scenario 1 Scenario 2 Units / Year: 1,200 100 (When is projected completion? How many per month?) HH Size: 2.5 2.5 (What kind of units? Who are the potential occupants?) Population: 3,000 250 PCW: $46.50 $46.50 (Who are the potential occupants?) Potential: $139,500 $11,625

  25. Why Important 4. Minimize the problems of potential pitfalls • Over Stating • Lost Credibility • Build a store too soon • Millions in lost Operating Profit • Lost profit makes you miss other opportunities • Under Stating • Missed opportunities • Or Worse • The EVIL Competitor takes the site

  26. Q & A THANK YOU!

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