The 2011 Report on Manufacturing Paper Excluding Newsprint: World Market Segmentation by City
ICON Group International, January 2011, Pages: 336
Market Potential Estimation Methodology
Overview
This study covers the world outlook for manufacturing paper excluding newsprint across more than 2000 cities. For the year reported, estimates are given for the latent demand, or potential industry earnings (P.I.E.), for the city in question (in millions of U.S. dollars), the percent share the city is of the region and of the globe. These comparative benchmarks allow the reader to quickly gauge a city vis-à-vis others. Using econometric models which project fundamental economic dynamics within each country and across countries, latent demand estimates are created. This report does not discuss the specific players in the market serving the latent demand, nor specific details at the product level. The study also does not consider short-term cyclicalities that might affect realized sales. The study, therefore, is strategic in nature, taking an aggregate and long-run view, irrespective of the players or products involved.
This study does not report actual sales data (which are simply unavailable, in a comparable or consistent manner in virtually all of the cities of the world). This study gives, however, my estimates for the worldwide latent demand, or the P.I.E. for manufacturing paper excluding newsprint. It also shows how the P.I.E. is divided across the world’s cities. In order to make these estimates, a multi-stage methodology was employed that is often taught in courses on international strategic planning at graduate schools of business.
What is Latent Demand and the P.I.E.?
The concept of latent demand is rather subtle. The term latent typically refers to something that is dormant, not observable, or not yet realized. Demand is the notion of an economic quantity that a target population or market requires under different assumptions of price, quality, and distribution, among other factors. Latent demand, therefore, is commonly defined by economists as the industry earnings of a market when that market becomes accessible and attractive to serve by competing firms. It is a measure, therefore, of potential industry earnings (P.I.E.) or total revenues (not profit) if a market is served in an efficient manner. It is typically expressed as the total revenues potentially extracted by firms. The “market” is defined at a given level in the value chain. There can be latent demand at the retail level, at the wholesale level, the manufacturing level, and the raw materials level (the P.I.E. of higher levels of the value chain being always smaller than the P.I.E. of levels at lower levels of the same value chain, assuming all levels maintain minimum profitability).
The latent demand for manufacturing paper excluding newsprint is not actual or historic sales. Nor is latent demand future sales. In fact, latent demand can be lower either lower or higher than actual sales if a market is inefficient (i.e., not representative of relatively competitive levels). Inefficiencies arise from a number of factors, including the lack of international openness, cultural barriers to consumption, regulations, and cartel-like behavior on the part of firms. In general, however, latent demand is typically larger than actual sales in a city market.
Another reason why sales do not equate to latent demand is exchange rates. In this report, all figures assume the long-run efficiency of currency markets. Figures, therefore, equate values based on purchasing power parities across countries. Short-run distortions in the value of the dollar, therefore, do not figure into the estimates. Purchasing power parity estimates of country income were collected from official sources, and extrapolated using standard econometric models. The report uses the dollar as the currency of comparison, but not as a measure of transaction volume. The units used in this report are: US $ mln.
For reasons discussed later, this report does not consider the notion of “unit quantities”, only total latent revenues (i.e., a calculation of price times quantity is never made, though one is implied). The units used in this report are U.S. dollars not adjusted for inflation (i.e., the figures incorporate inflationary trends) and not adjusted for future dynamics in exchange rates (i.e., the figures reflect average exchange rates over recent history). If inflation rates or exchange rates vary in a substantial way compared to recent experience, actually sales can also exceed latent demand (when expressed in U.S. dollars, not adjusted for inflation). On the other hand, latent demand can be typically higher than actual sales as there are often distribution inefficiencies that reduce actual sales below the level of latent demand.
As mentioned earlier, this study is strategic in nature, taking an aggregate and long-run view, irrespective of the players or products involved. If fact, all the current products or services on the market can cease to exist in their present form (i.e., at a brand-, R&D specification, or corporate-image level) and all the players can be replaced by other firms (i.e., via exits, entries, mergers, bankruptcies, etc.), and there will still be an international latent demand for manufacturing paper excluding newsprint at the aggregate level. Product and service offering details, and the actual identity of the players involved, while important for certain issues, are relatively unimportant for estimates of latent demand.
The Methodology
In order to estimate the latent demand for manufacturing paper excluding newsprint on a city-by-city basis, I used a multi-stage approach. Before applying the approach, one needs a basic theory from which such estimates are created. In this case, I heavily rely on the use of certain basic economic assumptions. In particular, there is an assumption governing the shape and type of aggregate latent demand functions. Latent demand functions relate the income of a country, city, state, household, or individual to realized consumption. Latent demand (often realized as consumption when an industry is efficient), at any level of the value chain, takes place if an equilibrium in realized. For firms to serve a market, they must perceive a latent demand and be able to serve that demand at a minimal return. The single most important variable determining consumption, assuming latent demand exists, is income (or other financial resources at higher levels of the value chain). Other factors that can pivot or shape demand curves include external or exogenous shocks (i.e., business cycles), and or changes in utility for the product in question.
Ignoring, for the moment, exogenous shocks and variations in utility across countries, the aggregate relation between income and consumption has been a central theme in economics. The figure below concisely summarizes one aspect of problem. In the 1930s, John Meynard Keynes conjectured that as incomes rise, the average propensity to consume would fall. The average propensity to consume is the level of consumption divided by the level of income, or the slope of the line from the origin to the consumption function. He estimated this relationship empirically and found it to be true in the short-run (mostly based on cross-sectional data). The higher the income, the lower the average propensity to consume. This type of consumption function is labeled "A" in the figure below (note the rather flat slope of the curve). In the 1940s, another macroeconomist, Simon Kuznets, estimated long-run consumption functions which indicated that the marginal propensity to consume was rather constant (using time series data across countries). This type of consumption function is show as "B" in the figure below (note the higher slope and zero-zero intercept). The average propensity to consume is constant.
Is it declining or is it constant? A number of other economists, notably Franco Modigliani and Milton Friedman, in the 1950s (and Irving Fisher earlier), explained why the two functions were different using various assumptions on intertemporal budget constraints, savings, and wealth. The shorter the time horizon, the more consumption can depend on wealth (earned in previous years) and business cycles. In the long-run, however, the propensity to consume is more constant. Similarly, in the long run, households, industries or countries with no income eventually have no consumption (wealth is depleted). While the debate surrounding beliefs about how income and consumption are related and interesting, in this study a very particular school of thought is adopted. In particular, we are considering the latent demand for manufacturing paper excluding newsprint across some 230 countries. The smallest have fewer than 10,000 inhabitants. I assume that all of these counties fall along a "long-run" aggregate consumption function. This long-run function applies despite some of these countries having wealth, current income dominates the latent demand for manufacturing paper excluding newsprint. So, latent demand in the long-run has a zero intercept. However, I allow firms to have different propensities to consume (including being on consumption functions with differing slopes, which can account for differences in industrial organization, and end-user preferences).
Given this overriding philosophy, I will now describe the methodology used to create the latent demand estimates for manufacturing paper excluding newsprint. Since ICON Group has asked me to apply this methodology to a large number of categories, the rather academic discussion below is general and can be applied to a wide variety of categories, not just manufacturing paper excluding newsprint.
Step 1. Product Definition and Data Collection
Any study of latent demand across countries requires that some standard be established to define “efficiently served”. Having implemented various alternatives and matched these with market outcomes, I have found that the optimal approach is to assume that certain key countries or cities are more likely to be at or near efficiency than others. These are given greater weight than others in the estimation of latent demand compared to others for which no known data are available. Of the many alternatives, I have found the assumption that the world’s highest aggregate income and highest income-per-capita markets reflect the best standards for “efficiency”. High aggregate income alone is not sufficient (i.e., China has high aggregate income, but low income per capita and can not assumed to be efficient). Aggregate income can be operationalized in a number of ways, including gross domestic product (for industrial categories), or total disposable income (for household categories; population times average income per capita, or number of households times average household income per capita). Brunei, Nauru, Kuwait, and Lichtenstein are examples of countries with high income per capita, but not assumed to be efficient, given low aggregate level of income (or gross domestic product); these countries have, however, high incomes per capita but may not benefit from the efficiencies derived from economies of scale associated with large economies. Only countries with high income per capita and large aggregate income are assumed efficient. This greatly restricts the pool of countries to those in the OECD (Organization for Economic Cooperation and Development), like the United States, or the United Kingdom (which were earlier than other large OECD economies to liberalize their markets).
The selection of countries is further reduced by the fact that not all countries in the OECD report industry revenues at the category level. Countries that typically have ample data at the aggregate level that meet the efficiency criteria include the United States, the United Kingdom and in some cases France and Germany.
Latent demand is therefore estimated using data collected for relatively efficient markets from independent data sources (e.g. Euromonitor, Mintel, Thomson Financial Services, the U.S. Industrial Outlook, the World Resources Institute, the Organization for Economic Cooperation and Development, various agencies from the United Nations, industry trade associations, the International Monetary Fund, and the World Bank). Depending on original data sources used, the definition of “manufacturing paper excluding newsprint” is established. In the case of this report, the data were reported at the aggregate level, with no further breakdown or definition. In other words, any potential product or service that might be incorporated within manufacturing paper excluding newsprint falls under this category. Public sources rarely report data at the disaggregated level in order to protect private information from individual firms that might dominate a specific product-market. These sources will therefore aggregate across components of a category and report only the aggregate to the public. While private data are certainly available, this report only relies on public data at the aggregate level without reliance on the summation of various category components. In other words, this report does not aggregate a number of components to arrive at the “whole”. Rather, it starts with the “whole”, and estimates the whole for all cities and the world at large (without needing to know the specific parts that went into the whole in the first place).
Given this caveat, this study covers “manufacturing paper excluding newsprint” as defined by the North American Industrial Classification system or NAICS (pronounced “nakes”). manufacturing paper excluding newsprint The NAICS code for manufacturing paper excluding newsprint is 322121. It is for this definition of manufacturing paper excluding newsprint that the aggregate latent demand estimates are derived. “Manufacturing paper excluding newsprint” is specifically defined as follows:
322121
This U.S. industry comprises establishments primarily engaged in manufacturing paper (except newsprint and uncoated groundwood paper) from pulp. These establishments may manufacture or purchase pulp. In addition, the establishments may also convert the paper they make.
3221211
Clay-coated printing and converting paper
32212111
Clay coated groundwood
3221211111
Clay_coated groundwood printing and converting paper (containing more than 10 percent mechanical fiber), including prime_coated body stock
32212112
Clay coated freesheet and prime coated body stock
3221211221
Clay_coated freesheet printing and converting paper, coated one side (containing not more than 10 percent mechanical fiber), including prime_ coated body stock
3221211231
Clay_coated freesheet printing and converting paper, coated two sides (containing not more than 10 percent mechanical fiber), including prime_ coated body stock
3221213
Uncoated freesheet paper
32212131
Bond and writing paper
3221213111
Bond and writing paper, including protective check, uncoated freesheet
3221213115
Form bond paper in rolls, uncoated freesheet
32212132
Other writing paper, including body stock for communication papers, technical and reproduction, tablet, ledger, onion skin, papeterie and wedding, etc., uncoated freesheet
3221213221
Body stock for communication, copying, and related papers, uncoated freesheet
3221213225
Other uncoated freesheet technical and reproduction papers, including mimeograph and gelatin and spirit process duplicating
3221213231
Writing tablet paper, uncoated freesheet
3221213235
Other writing paper, including ledger, onion skin, papeterie and wedding, etc., uncoated freesheet
32212133
Publication and printing paper, all types
3221213341
Plain publication and printing paper, uncoated freesheet, including machine finish, English finish, antique, bulking, eggshell, and supercalendered
3221213345
Offset publication and printing paper, uncoated freesheet
3221213351
Other uncoated publication and printing freesheet paper
32212134
Cover and text papers and other converting and misc. uncoated freesheet
3221213461
Cover and text papers, uncoated freesheet
3221213471
Envelope (white wove) paper, uncoated freesheet
3221213481
Kraft envelope (bleached kraft and brown kraft) paper, uncoated freesheet
3221213491
Uncoated freesheet body stock paper for coating (base or raw stock for conversion of off_machine coating) and all other miscellaneous uncoated freesheet
3221215
Bleached bristols, excluding cotton fiber index and bogus
32212151
Bleached bristols (weight more than 150 g per sq meter), excluding cotton fiber index and bogus
3221215111
Uncoated bleached bristol tag stock (weight more than 150 g per sq meter)
3221215121
Uncoated bleached bristol file folder stock (weight more than 150 g per sq meter)
3221215131
Other uncoated bleached bristols, including tabulating card, index, printing, and postcard stock (weight more than 150 g per sq meter), excluding cotton fiber index and bogus
3221215141
Coated bleached bristols (weight more than 150 g per sq meter), excluding cotton fiber index and bogus
3221217
COTTON FIBER PAPER (CONTAINING 25 PERCENT OR MORE COTTON OR SIMILAR FIBERS) AND THIN PAPER
32212171
Cotton fiber paper (containing 25 percent or more cotton or similar fibers) and thin paper
3221217111
Cotton fiber paper (containing 25 percent or more cotton or similar fibers)
3221217121
Thin paper including carbonizing, Bible, mimeograph and duplicating stencil tissue, India, tipping, condenser, cigarette paper, etc.
3221219
UNBLEACHED KRAFT (NOT LESS THAN 80 PERCENT) PACKAGING AND INDUSTRIAL CONVERTING PAPER
32212191
Unbleached kraft (not less than 80 percent) packaging and industrial converting paper
3221219111
Unbleached kraft shipping sack paper (meets minimum Federal specifications UU_S_48) and other unbleached kraft shipping sack paper
3221219121
Unbleached kraft bag and sack paper (except shipping), including grocers’ and other unbleached kraft bag and sack for notion, millinery, etc.
3221219131
Unbleached kraft wrapping and specialty packaging paper (92 lb or less), including flour, sugar, dog food, fast foods, dairy products, etc.
3221219191
Other unbleached kraft converting paper, including creping (92 lb or less), asphalting paper, coating and laminating, gumming, etc.
322121A
Packaged and industrial converting paper, except unbleached kraft
322121A1
Packaging and industrial converting paper, except unbleached kraft
322121A111
Shipping sack paper (except unbleached kraft), including combination kraft and rope, bleached and semibleached
322121A121
Other bag and sack paper, except unbleached kraft and shipping, including grocers’, liquor, millinery, notion, variety, etc.
322121A131
Specialty packaging (92 lbs or less) and wrapping paper, except unbleached kraft (butcher, flour, sugar, fast foods, confectionery, etc.)
322121A141
Other converting stock, including asphalting and creping stocks (not more than 92 lbs), coating and laminating, gummed, twisting and spinning stock (19 lbs or more), and waxing stock (18 lbs or more)
322121A151
Glassine, greaseproof, and vegetable parchment, all grades regardless of end use (92 lb or less)
322121C
Special industrial paper, except specialty packaging
322121C1
Special industrial paper, except specialty packaging, including absorbent, battery separator, electrical papers, etc.
322121C100
Special industrial paper, except specialty packaging, including absorbent, battery separator, electrical papers, etc.
322121E
CONSTRUCTION PAPER
322121E1
Construction paper
322121E111
Roofing felts, saturating and dry
322121E121
Other construction paper, including sheathing paper, floor covering felts, automotive, insulating paper blankets, etc.
322121G
Tissue paper and other machine-creped paper
322121G1
Toilet tissue stock
322121G111
Toilet tissue stock
322121G2
Toweling paper stock, except wiper stock
322121G221
Toweling paper stock, except wiper stock
322121G3
Tissue paper and other machine_creped paper, excluding toilet tissue stock and toweling paper stock
322121G331
Facial tissue stock, except toweling, napkin, and toilet
322121G341
Napkin paper stock, except sanitary napkin stock wadding
322121G351
Wiper tissue stock, regular, facial, and wadding stock
322121G361
Other sanitary paper stock, including sanitary napkin stock wadding, aseptic paper stock, reinforced paper stock, etc.
322121G371
Wrapping tissue, including florist tissue stock, hosiery paper, interleaving, antitarnish, etc.
322121G391
Other tissue paper stock, including waxing tissue stock, creped wadding for interior packaging (excluding sanitary and thin)
322121J
Sanitary napkins and tampons (made in paper mills)
322121J1
Sanitary napkins and tampons (made in paper mills)
322121J111
Sanitary napkins, including maternity pads (made in paper mills)
322121J121
Tampons (made in paper mills)
322121K
DISPOSABLE DIAPERS AND SIMILAR DISPOSABLE PRODUCTS, MADE IN PAPER MILLS
322121K1
Disposable diapers and similar disposable products (including sanitary napkins, tampons, training pants, and incontinent pads), made in paper mills
322121K100
Disposable diapers and similar disposable products (including sanitary napkins, tampons, training pants, and incontinent pads), made in paper mills
322121L
Disposable diapers, including adult, and similar disposable products
322121L1
Disposable diapers (usually containing pulp or cellulose fibers), and similar disposable products (made in paper mills)
322121L111
Disposable diapers, except adult, including disposable training pants
322121L121
Disposable incontinent pads, bed pads, and adult diapers
322121L131
Disposable incontinent pads and bedpads (made in paper mills)
322121M
Miscellaneous receipts
322121N
Sanitary tissue paper products
322121N1
Facial tissues and handkerchiefs, including sputum wipes
322121N111
Facial tissues and handkerchiefs, including sputum wipes, made in paper mills
322121N2
Paper table napkins, bulk & dispenser, industrial and retail
322121N201
Paper table napkins, industrial and retail packages, bulk and dispenser types, made in paper mills
322121N221
Paper table napkins, industrial, regular type, single~ply, bulk (made in paper mills)
322121N223
Paper table napkins, industrial, regular type, single~ply, dispenser (made in paper mills)
322121N225
Paper table napkins, industrial (bulk and dispenser type), facial tissue type, two~ply or more (made in paper mills)
322121N227
Paper table napkins, retail packages (resale), regular type, single~ply (made in paper mills)
322121N229
Paper table napkins, retail packages (resale), facial tissue type, two~ply or more (made in paper mills)
322121N3
Toilet tissue
322121N331
Toilet tissue, retail packages, rolls and ovals, facial tissue type, two_ply or more, made in paper mills
322121N4
Toilet tissue, retail packages, rolls and ovals, regular type, single_ply, made in paper mills
322121N433
Toilet tissue, retail packages, rolls and ovals, regular type, single_ply, made in paper mills
322121N5
Toilet tissue, rolls and ovals, industrial, and interfolded and flat package type (made in paper mills)
322121N535
Toilet tissue, rolls and ovals, industrial, facial tissue type, two~ply or more (made in paper mills)
322121N541
Toilet tissue, rolls and ovals, industrial, regular type, single~ply (made in paper mills)
322121N551
Toilet tissue, interfolded and flat package (made in paper mills)
322121N6
Paper towels
322121N661
Paper towels, industrial packages (rolled, folded, and interfolded), made in paper mills
322121N7
Paper towels, retail packages (rolled, folded, and interfolded), made in paper mills
322121N701
Paper towels, retail packages (rolled, folded, and interfolded), made in paper mills
322121N771
Paper towels (rolled, folded, or interfolded), retail packages (resale), single~ ply (made in paper mills)
322121N773
Paper towels (rolled, folded, or interfolded), retail packages (resale), two~ply or more (made in paper mills)
322121N8
Other sanitary tissue paper products
322121N881
Paper wipers (windshield, industrial, and lithographic plate), except nonwoven (made in paper mills)
322121N891
Other sanitary paper products, including absorbent pads, toilet seat covers, bibs, headrests, tray covers, etc. (made in paper mills)
322121N9
Other sanitary paper products (including industrial packaged toilet tissue (all types), paper wipers (except nonwoven), absorbent pads, etc.), made in paper mills
322121N901
Other sanitary paper products (including industrial packaged toilet tissue (all types), paper wipers (except nonwoven), absorbent pads, etc.), made in paper mills
322121P
Primary products
322121S
Secondary products
322121SM
Secondary products and miscellaneous receipts
Furthermore, the definition of NAICS code 322121 includes the following:
Absorbent paper stock manufacturing
Asphalt paper made in paper mills
Bond paper made in paper mills
Book paper, coated, made in paper mills
Bristols paper stock manufacturing
Building paper stock manufacturing
Cigarette paper made in paper mills
Construction paper, school and art, made in paper mills
Cotton fiber paper stock manufacturing
Diapers, disposable, made in paper mills
Facial tissues made in paper mills
Felts, asphalt, made in paper mills
Glassine wrapping paper made in paper mills
Groundwood paper, coated, laminated, or treated in paper mills
Groundwood paper, coated, made in paper mills
Kraft paper stock manufacturing
Looseleaf fillers and paper made in paper mills
Napkins, table, made in paper mills
Office paper (e.g., computer printer, photocopy, plain paper) made in paper mill
Paper (except newsprint, uncoated groundwood) manufacturing
Paper (except newsprint, uncoated groundwood) products made in paper mills
Paper (except newsprint, uncoated groundwood), coated, laminated or treated, made
Paper mills (except newsprint, uncoated groundwood paper mills)
Paper stock for conversion into paper products (e.g., bag and sack stock, envelop
Paper towels made in paper mills
Paper, asphalt, made in paper mills
Pulp and paper (except groundwood, newsprint) combined manufacturing
Pulp mills producing paper (except groundwood, newsprint)
Sanitary napkins and tampons made in paper mills
Sanitary paper products (except newsprint, uncoated groundwood) made in paper mil
Sanitary paper stock manufacturing
Sanitary products made in paper mills
Saturated felts made in paper mills
Sheathing paper (except newsprint, uncoated groundwood) made in paper mills
Tablets (e.g., memo, note, writing) made in paper mills
Tar paper, building and roofing, made in paper mills
Tissue paper stock manufacturing
Toilet paper made in paper mills
Towels, paper, made in paper mills
Writing paper made in paper mills.
Step 2. Filtering and Smoothing
Based on the aggregate view of manufacturing paper excluding newsprint as defined above, data were then collected for as many similar countries and cities as possible for that same definition, at the same level of the value chain. This generates a convenience sample from which comparable figures are available. If the series in question do not reflect the same accounting period, then adjustments are made. In order to eliminate short-term effects of business cycles, the series are smoothed using an 2 year moving average weighting scheme (longer weighting schemes do not substantially change the results). If data are available for a country, but these reflect short-run aberrations due to exogenous shocks (such as would be the case of beef sales in a country stricken with foot and mouth disease), these observations were dropped or "filtered" from the analysis.
Step 3. Filling in Missing Values
In some cases, data are available for countries or cities on a sporadic basis. In other cases, data may be available for only one year. From a Bayesian perspective, these observations should be given greatest weight in estimating missing years. Assuming that other factors are held constant, the missing years are extrapolated using changes and growth in aggregate national income. Based on the overriding philosophy of a long-run consumption function (defined earlier), cities which have missing data for any given year, are estimated based on historical dynamics of aggregate income for that country.
Step 4. Varying Parameter, Non-linear Estimation
Given the data available from the first three steps, the latent demand is estimated using a “varying-parameter cross-sectionally pooled time series model”. Simply stated, the effect of income on latent demand is assumed to be constant across cities unless there is empirical evidence to suggest that this effect varies (i.e., the slope of the income effect is not necessarily same for all countries). This assumption applies across cities along the aggregate consumption function, but also over time (i.e., not all cities are perceived to have the same income growth prospects over time and this effect can vary from city to city as well). Another way of looking at this is to say that latent demand for manufacturing paper excluding newsprint is more likely to be similar across cities that have similar characteristics in terms of economic development (i.e., African cities will have similar latent demand structures controlling for the income variation across the pool of African cities).
This approach is useful across cities for which some notion of non-linearity exists in the aggregate consumption function. For some categories, however, the reader must realize that the numbers will reflect a city’s contribution to global latent demand and may never be realized in the form of local sales. For certain category combinations this will result in what at first glance will be odd results. For example, the latent demand for the category “space vehicles” will exist for cities in “Togo” even though they have no space program. The assumption is that if the economies in these countries did not exist, the world aggregate for these categories would be lower. The share attributed to these cities is based on a proportion of their income (however small) being used to consume the category in question (i.e., perhaps via resellers).
Step 5. Fixed-Parameter Linear Estimation
Nonlinearities are assumed in cases where filtered data exist along the aggregate consumption function. Because the world consists of more than 2000 cities, there will always be those cities, especially toward the bottom of the consumption function, where non-linear estimation is simply not possible. For these cities, equilibrium latent demand is assumed to be perfectly parametric and not a function of wealth (i.e., a city’s stock of income), but a function of current income (a city’s flow of income). In the long run, if a city has no current income, the latent demand for manufacturing paper excluding newsprint is assumed to approach zero. The assumption is that wealth stocks fall rapidly to zero if flow income falls to zero (i.e., cities which earn low levels of income will not use their savings, in the long run, to demand manufacturing paper excluding newsprint). In a graphical sense, for low income cities, latent demand approaches zero in a parametric linear fashion with a zero-zero intercept. In this stage of the estimation procedure, low-income cities are assumed to have a latent demand proportional to their income, based on the city closest to it on the aggregate consumption function.
Step 6. Aggregation and Benchmarking
Based on the models described above, latent demand figures are estimated for all cities of the world, including for the smallest economies. These are then aggregated to get world totals and regional totals. To make the numbers more meaningful, regional and global demand averages are presented. Figures are rounded, so minor inconsistencies may exist across tables.
1 INTRODUCTION & METHODOLOGY
1.1 Overview and Definitions
1.2 Market Potential Estimation Methodology
1.2.1 Overview
1.2.2 What is Latent Demand and the P.I.E.?
1.2.3 The Methodology
1.2.3.1 Step 1. Product Definition and Data Collection
1.2.3.2 Step 2. Filtering and Smoothing
1.2.3.3 Step 3. Filling in Missing Values
1.2.3.4 Step 4. Varying Parameter, Non-linear Estimation
1.2.3.5 Step 5. Fixed-Parameter Linear Estimation
1.2.3.6 Step 6. Aggregation and Benchmarking
2 USING THE DATA
3 CITY SEGMENTS RANKED BY MARKET SIZE
3.1 Top 15 Markets
3.2 Markets 16 to 30
3.3 Remaining Cities by Market Rank
4 CITY SEGMENTS IN ALPHABETICAL ORDER
4.1 A: from Aalborg to Az Zawiyah
4.2 B: from Bacolod to Bydgoszcz
4.3 C: from Caaguazu to Cyangugu
4.4 D: from Da Nang to Dzhizak
4.5 E: from East London to Esteli
4.6 F: from Fagatogo to Funchal
4.7 G: from Gabes to Gyumri
4.8 H: from Hachinohe to Hyderabad
4.9 I: from Iasi to Izmir
4.10 J: from Jaboatao to Jyvaskyla
4.11 K: from Kabul to Kzyl-Orda
4.12 L: from La Ceiba to Lyon
4.13 M: from Macae to Mzuzu
4.14 N: from Nacala to Nzerekore
4.15 O: from Oaklahoma City to Oyem
4.16 Ö: from Örebro to Örebro
4.17 P: from Pago Pago to Pyuthan
4.18 Q: from Qandahar to Quito
4.19 R: from Rabat to Rustavi
4.20 S: from S. Luis Potosi to Szombathely
4.21 T: from Tabligbo to Tyre
4.22 U: from Uberaba to Utulei
4.23 V: from Vacoas-Phoenix to Vukovar
4.24 W: from Wadi Medani to Wuhan
4.25 X: from Xalapa to Xi'an
4.26 Y: from Yamagata to Yungkang
4.27 Z: from Zadar to Zvishavane
5 CITY SEGMENTS RANKED BY COUNTRY
5.1 Afghanistan
5.2 Albania
5.3 Algeria
5.4 American Samoa
5.5 Andorra
5.6 Angola
5.7 Antigua and Barbuda
5.8 Argentina
5.9 Armenia
5.10 Aruba
5.11 Australia
5.12 Austria
5.13 Azerbaijan
5.14 Bahrain
5.15 Bangladesh
5.16 Barbados
5.17 Belarus
5.18 Belgium
5.19 Belize
5.20 Benin
5.21 Bermuda
5.22 Bhutan
5.23 Bolivia
5.24 Bosnia and Herzegovina
5.25 Botswana
5.26 Brazil
5.27 Brunei
5.28 Bulgaria
5.29 Burkina Faso
5.30 Burma
5.31 Burundi
5.32 Cambodia
5.33 Cameroon
5.34 Canada
5.35 Cape Verde
5.36 Central African Republic
5.37 Chad
5.38 Chile
5.39 China
5.40 Christmas Island
5.41 Colombia
5.42 Comoros
5.43 Congo (formerly Zaire)
5.44 Cook Islands
5.45 Costa Rica
5.46 Cote d'Ivoire
5.47 Croatia
5.48 Cuba
5.49 Cyprus
5.50 Czech Republic
5.51 Denmark
5.52 Djibouti
5.53 Dominica
5.54 Dominican Republic
5.55 Ecuador
5.56 Egypt
5.57 El Salvador
5.58 Equatorial Guinea
5.59 Estonia
5.60 Ethiopia
5.61 Fiji
5.62 Finland
5.63 France
5.64 French Guiana
5.65 French Polynesia
5.66 Gabon
5.67 Georgia
5.68 Germany
5.69 Ghana
5.70 Greece
5.71 Greenland
5.72 Grenada
5.73 Guadeloupe
5.74 Guam
5.75 Guatemala
5.76 Guinea
5.77 Guinea-Bissau
5.78 Guyana
5.79 Haiti
5.80 Honduras
5.81 Hong Kong
5.82 Hungary
5.83 Iceland
5.84 India
5.85 Indonesia
5.86 Iran
5.87 Iraq
5.88 Ireland
5.89 Israel
5.90 Italy
5.91 Jamaica
5.92 Japan
5.93 Jordan
5.94 Kazakhstan
5.95 Kenya
5.96 Kiribati
5.97 Kuwait
5.98 Kyrgyzstan
5.99 Laos
5.100 Latvia
5.101 Lebanon
5.102 Lesotho
5.103 Liberia
5.104 Libya
5.105 Liechtenstein
5.106 Lithuania
5.107 Luxembourg
5.108 Macau
5.109 Madagascar
5.110 Malawi
5.111 Malaysia
5.112 Maldives
5.113 Mali
5.114 Malta
5.115 Marshall Islands
5.116 Martinique
5.117 Mauritania
5.118 Mauritius
5.119 Mexico
5.120 Micronesia Federation
5.121 Moldova
5.122 Monaco
5.123 Mongolia
5.124 Morocco
5.125 Mozambique
5.126 Namibia
5.127 Nauru
5.128 Nepal
5.129 New Caledonia
5.130 New Zealand
5.131 Nicaragua
5.132 Niger
5.133 Nigeria
5.134 Niue
5.135 Norfolk Island
5.136 North Korea
5.137 Norway
5.138 Oman
5.139 Pakistan
5.140 Palau
5.141 Palestine
5.142 Panama
5.143 Papua New Guinea
5.144 Paraguay
5.145 Peru
5.146 Philippines
5.147 Poland
5.148 Portugal
5.149 Puerto Rico
5.150 Qatar
5.151 Republic of Congo
5.152 Reunion
5.153 Romania
5.154 Russia
5.155 Rwanda
5.156 San Marino
5.157 Sao Tome E Principe
5.158 Saudi Arabia
5.159 Senegal
5.160 Seychelles
5.161 Sierra Leone
5.162 Singapore
5.163 Slovakia
5.164 Slovenia
5.165 Solomon Islands
5.166 Somalia
5.167 South Africa
5.168 South Korea
5.169 Spain
5.170 Sri Lanka
5.171 St. Kitts and Nevis
5.172 St. Lucia
5.173 St. Vincent and the Grenadines
5.174 Sudan
5.175 Suriname
5.176 Swaziland
5.177 Sweden
5.178 Switzerland
5.179 Syrian Arab Republic
5.180 Taiwan
5.181 Tajikistan
5.182 Tanzania
5.183 Thailand
5.184 The Bahamas
5.185 The British Virgin Islands
5.186 The Cayman Islands
5.187 The Falkland Islands
5.188 The Gambia
5.189 The Netherlands
5.190 The Netherlands Antilles
5.191 The Northern Mariana Island
5.192 The U.S. Virgin Islands
5.193 The United Arab Emirates
5.194 The United Kingdom
5.195 The United States
5.196 Togo
5.197 Tokelau
5.198 Tonga
5.199 Trinidad and Tobago
5.200 Tunisia
5.201 Turkey
5.202 Turkmenistan
5.203 Tuvalu
5.204 Uganda
5.205 Ukraine
5.206 Uruguay
5.207 Uzbekistan
5.208 Vanuatu
5.209 Venezuela
5.210 Vietnam
5.211 Wallis and Futuna
5.212 Western Sahara
5.213 Western Samoa
5.214 Yemen
5.215 Zambia
5.216 Zimbabwe
6 DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS
6.1 Disclaimers & Safe Harbor
6.2 ICON Group International, Inc. User Agreement Provisions
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