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Guy
ABAG's Bay Area population projections are way too high
The Association of Bay Area Governments (ABAG) does not disclose detailed annual projections. Instead, they disclose that the Bay Area population will be 10.3 million in 2050. A related graph within their Plan Bay Area 2050 indicates their projections follow a linear trend from 2015 to 2050. Thus, one can easily reconstruct annual projections between 2015 and 2050.
We already know that ABAG Bay Area population projections are way off
ABAG's projections use 2015 as the most recent year of actuals.
ABAG's projections to 2022 (most recent actual data) show how much ABAG dramatically overshot the Bay Area's population growth. While ABAG projected that during this period, the Bay Area population would increase from 7.6 million to over 8.1 million, it actually decreased to under 7.6 million. ABAG overestimated the Bay Area population by 7.6%. This is a huge error this early in this forecast.
The two graphs above show that this is not just ABAG omitting the impact of COVID and Work From Home (WFH). Just in the fourth year of the forecast (2020) before the impact of COVID and WFH is fully felt, ABAG's error is already 3.0%. That's a huge error this early in a demographic forecast.
A quick review of recent history
The Bay Area's population growth is much affected by migration from:
a) Other California counties;
b) Other States within the US;
c) Other border countries, mainly Mexico.
Even though net migration can change direction, for the most part, if a) b) and c) above grow at a certain rate, they typically will pull the Bay Area population upward (but not as high as a), b), and c)). This external migration effect compensates for the Bay Area having an older population associated with lower fertility and lower natural growth rates than the other mentioned entities.
You can see that from 2000 to 2022, the Bay Area population grew by about 11%. And, that it grew a bit slower than California (16%), which in turn grew slower than the US (20%), which grew slower than Mexico (30%). The regions' population growths are all tiered by their respective demographic profile (aging, fertility rate, natural growth rate).
ABAG also makes an ongoing case that the Bay Area population growth is fueled by this region's record of world-beating innovation. Well since 2000, the Bay Area has developed and distributed amazing innovations including Social Media, Web Analytics, Cloud Computing, Blockchain, Machine Learning, and now AI. However, they have not left a footprint in the demographic data. As shown above, all the other mentioned regions have grown much faster than the Bay Area since 2000. This trend is unlikely to change. Innovation is about efficiency. It may replace as many jobs as it creates. Thus, its net effect on the population is not that material.
Contrasting the history vs. population forecasts
The population growth of the Bay Area migration feeders (California, US, Mexico) is expected to slow down because of their own demographic aging. This will cause a further slowdown in the Bay Area population growth in addition to its own demographic aging that is more pronounced than for the other regions.
But, ABAG does not respect these demographic trends.
Looking at the two graphs above, you can immediately observe that the ABAG Bay Area projection (red line in the right-hand graph) does not make sense. It projects that the Bay Area population would grow by over 35% between 2015 and 2050, a lot faster than the UN Medium scenario projections for Mexico (20%) and the US (15%).
The two graphs above show a dissonant contrast. During the history, Mexico (dark blue) has by far the fastest population growth (younger country, faster natural growth rate, etc.). And, the Bay Area (red) has the slowest growth rate (older population, etc.). But, when looking at forecasts, ABAG Bay Area forecast suggests it would grow a heck of a lot faster than Mexico and all other mentioned regions!
Also, look at the dramatic difference with the Department of Finance Demographic Research Unit (DRU) forecast for the Bay Area. It shows a far lower growth rate. That two California Government entities (ABAG vs. DRU) have such divergent forecasts is unsettling.
The table below discloses the same data in a tabular form.
Here are a few key points we can derive from the above tables:
- All the "reasonable" forecasts show that there is a dramatic decline in population growth within all the regions at all levels between the history and forecast periods. This is a trend that affects the entire developed World due to omnipresent demographic aging.
- Focusing on Mexico over the forecast period (2015 - 2050) notice how its annual growth rate at 0.51% is dramatically lower than during history (2000 - 2022). It is actually as low or lower than all the regions during history.
- The DRU Bay Area projection is somewhat respectful of this declining trend in population growth. Between history and its forecast, you see the Bay Area's annual growth decline from 0.51% to 0.22%.
- Contrary to all the other regions that see an abrupt decline between history and forecast, ABAG anticipates the Bay Area annual population growth rate would increase by 70%! That is calculated as: 0.87%/0.51% - 1 = 70%.
- During history, Mexico grows more than twice as fast as the Bay Area. But, over the forecast period, ABAG Bay Area grows 70% faster than Mexico! During history, the US grows 59% faster than the Bay Area. Over the forecast period, ABAG Bay Area grows more than twice as fast as the US!
We already know that since 2015, ABAG's forecast is way off. ABAG should have revised this forecast years ago.