1.2. Abstract

Population projections are key for policy making and planning. Currently, most countries, and international organizations like the World Bank and the United Nations, produce population projections using the cohort-component method. The method is simple and applicable in absence of detailed data sources. But it is limited to projecting a population by age, sex, and very few additional variables, such as province or broad education categories. A more advanced—but still uncommon—approach involves dynamic micro-simulation models, where populations are represented by large samples of individual people and their life-courses are simulated over time. This approach is more complex, but has major advantages: it can produce detailed projections of a broad variety of individual characteristics, it can model realistic life-courses and their diversity, and it supports the modeling of interactions between people. Such models also support more detailed planning and policy development, and can provide the demographic core of more extensive socioeconomic models. While currently applied almost exclusively in the developed world, the benefits can be highly significant in the context of developing countries.

This report demystifies micro-simulation for population projections and demonstrates its feasibility in the developing world. Advanced and freely available programming tools, as well as improvements in the availability and quality of micro data, make dynamic micro-simulation feasible at a reasonable cost.

At the core of the report is an example of a portable application, which introduces statistical methods and programming techniques used in micro-simulation, and which can be adapted and replicated for most developing countries. The model has an intuitive graphical user interface and runs on a standard PC. The report includes step-by step documentation of its computer implementation. Its source code and statistical analysis scripts are available to model builders, who can use them as a textbook and toolbox for micro-simulation model development and implementation.

Keywords: Micro-simulation, Population Projection, Development