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Florida State University 
Department of Urban and Regional Planning
Planning Methods III: Forecasting 





Topic
Summary
The Importance
of Population
Estimates,
Projections, and
Forecasts
Demographic
Analysis
Techniques
Key Concepts
Lessons to
be Learned
References
Links
 

Demographic Methods

Topic Summary

"Since its beginning at the turn of the century, urban and regional planning has been largely justified as an institutional mechanism for providing information about the future to guide current decision
making
." (Klosterman, p. 3)
At all levels of geography and at all levels of government, one of the primary tasks for professional planners is to provide some guidance for decisions that are likely to have a great effect upon the future of a given area. This guidance often takes the form of determining existing conditions, calculating recent changes that resulted in those current conditions, and then projecting those changes into the future. In other instances, a planner is called upon to use their expertise of local conditions and trends to forecast future conditions. In other cases where little data is available and local conditions are rapidly changing (like emerging suburban areas), the planner must rely upon intuition, opinion, and a little luck to provide accurate forecasts for the future.
In short, the very term "planning" suggests that the profession is intimately involved in the task of foretelling the future, usually based upon intuition, personal opinion, or, hopefully, through the use of rational, defensible methods. Although sometimes haphazardly applied, a core set of demographic projection methods have been developed for use by planners in small area and large area when developing forecasts. It is to these methods that we will turn our attention to shortly.

The Importance of Population

Of all responsibilities of the profession, the estimation of current levels and the prediction of future levels of population remain among the most important for planners. At any level of geography, the full range of revenues, services, conditions, and needs are predicated on the local population level. Clearly, "everything flows from population". For example:
  • Local tax revenues are generally tied to the number of persons (or households). A declining population is leads to declining revenues for a municipality, hence the importance of the issue of "growth" to local governments.
  • Local services are intimately tied to population levels as police offices, fire stations, park acreage, sewer capacity, and a host of other services directly linked to the size of the local population, usually in the form of local standards for these services (i.e. 10 acres of park land per 1000 people).
  • Transportation infrastructure is impacted directly by the number of people in the area with larger numbers leading to more cars, more pedestrians, more bus riders.

Estimates and Projections and Forecasts (Oh My!)

Prior introducing the demographic analysis/projection techniques, a word or two about vocabulary. Like any technique, there is a certain level of jargon associated with these techniques. Specifically, we need to distinguish between estimates, projections, and forecasts.
Estimate
An indirect measure of a past or present condition that can be directly measured. For example, you can estimate current ridership levels on a bus route by counting riders on a sample of days during a given month.
Recognize that planners do not make "estimates" of future conditions. An estimate is used only for past or current conditions and therefore does not require anything in the way of a "crystal ball". Also, unlike projections and forecasts, estimates are directly measured and therefore are based upon what is known and able to be checked for accuracy.
Projection
A conditional "if, then" statement about the future. For example, if a city grew by 10% between 1980 and 1990 from 10,000 to 11,000, then given a continued ten year growth rate of 10%, that city will have a population of 12,100 in the year 2000.
A projection is the most popular and most defensible "crystal ball" method because it is impossible to make an incorrect projection if one's calculations are correct. A projection simply states that "if the following happens, then the future will be this way". If the following does not happen, the analyst has not made a mistake, rather the conditional if, then statement did not result.
Forecast
A judgmental statement that is the "best guess" about a future condition; a forecast is the analyst's determination of the most likely future. For example, given a range of projections, an analyst may decide that because of the strong economy and growing popularity of the Northwest, King County's population is expected to grow by 30% between 1990 and 2010. This would be that analyst's best guess about the future, not a conditional statement about future conditions.
Because of their difficulty, high likelihood of inaccuracy, and controversial results, forecasts are often left to well-paid consultants that have mastered the various projection methods. Population forecasts are usually a necessary, but inherently incorrect part of the planning process. At some point a "most likely" future must be determined and appropriate actions must then follow from this determination.
However, only very rarely are forecasts very accurate, and more often than not unforeseen (and oftentimes unforeseeable) events result in wildly inaccurate forecasts (just look at King County's population projections of the 1970s for an excellent example of this). When possible, then, planners should rely upon projections, not forecasts, to inform and advise decision-makers.

Demographic Analysis Techniques

There are two common techniques utilized by planners that are projecting future conditions. Each has its own advantages and disadvantages and should be used only with careful consideration of their limitations.
I. Extrapolation Techniques: These techniques use total population figures from the past to project future population levels. These techniques do not disaggregate the population figures and therefore are easy to calculate, but limited in their application.
II. Cohort-Component Technique: This technique is more data intensive because it disaggregates total population figures into age/gender (and sometimes race) "cohorts". Further, the different "components" of population change (births, deaths, and migration) are taken into account and past figures for these components are applied to the current age/sex cohorts.

Key Concepts

When undertaking this all important task of projecting future conditions, a quote from Klosterman should guide your work:
"The planners' task is to combine the most reliable information about the past with the most appropriate assumptions about the future to prepare the best possible forecasts." (Klosterman, p. 4)
  • The importance of population projections and their implications for planning at all levels of government and all levels of geography.
  • The difference between estimates, projections and forecasts.
  • The fundamental differences between the Extrapolation Technique and the Cohort-Component Technique.

Lessons to be Learned

  • As the name "planning" suggests, one of the major purposes of the profession is to help an area get ready for future conditions (to plan!). However, looking into the crystal ball is a difficult and hazardous task as projections are limited by the likelihood of unforeseen events.
  • When making projections, it is important to develop a range of future conditions to illustrate that the future is largely an unknown quantity. In doing so, even when making a forecast, an analyst can provide an ample "range" within which planning can take place.

References

Armstrong, J. Scott. 1978. Long-range Forecasting: From crystal Ball to Computer. New York: Jon Wiley and Sons.
Klosterman, Richard E. 1990. Community and Analysis Planning Techniques. Rowmand and Littlefield Publishers, Inc. Savage, Maryland. See Chapters 1-8.
Klosterman, Richard E., Richard K. Brail, and Earl G. Bossard. 1993. Spreadsheet Models for Urban and Regional Analysis.
Pittenger, Donald. 1976. Projecting State and Local Populations. Cambridge, MA: Ballinger.

Links

United States Census Bureau
Washington State Government Home Page
Puget Sound Regional Council
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