Jefferson County | CNU27.Louisville Ramsey County | CNU28.StPaul
Join us in a tour of two very unique places: Louisville is the host city for the CNU27 congress this June; and St. Paul will be the host city for the CNU28 congress next year. Our journey begins with a comparison of population and per capita income within Jefferson County, Kentucky and Ramsey County, Minnesota.
These two variables are the fundamental building blocks needed to forecast total personal income and resident expenditure potential for retail trades. Americans tend to spend an average of 50% of their earned income on retail trades, including big-ticket items like cars, furniture, jewelry, gasoline, groceries, plus all conventional stores and merchants. So, it is possible forecast to total volume of retail expenditures within each county, city or place, like this: Population * Per Capita Income = Total Personal Income
Total Personal Income * 50% = Total Resident Expenditure Potential on Retail Trades Forecasting population and income is easier than you might imagine. First, begin with Census estimates of total population for the years 2000 and 2010, and then use trends from the American Community Survey (ACS) to forecast it for future years like 2020 and 2025. Although the ACS data are just estimates, they can still be used to build confidence in forecasting negative, flat, or positive trends. The exhibit below show how it is done for population and income, with Jefferson County at the top of each page and Ramsey County at the bottom.
The City of Louisville and Jefferson County underwent a city-county merger in 2003. Therefore, this comparison is provided for Jefferson v. Ramsey Counties.
Exclusions: Retail Trade categories do not include restaurants, services, hotels, entertainment, recreation, and related venues)
Ramsey County has fewer residents than Jefferson County, and the first exhibit (above left) suggests that it may have lost 35,000 persons between 2000 and 2005. However, mixing data sources like this is risky business. The ACS data shown in these exhibits are only intended to serve as a baseline trend for forecasting the census years forward. Specifically, it is used here to forecast the population of Jefferson County to about 800,000 residents; and the population of Ramsey County to about 585,000 residents by the year 2025.
The second exhibit (above right) demonstrates a similar approach with per capita income, and shows that Ramsey County has a higher average per capita income than Jefferson County. Based on the ACS trends, Ramsey County should achieve a per capita income of about $39,000 by the year 2025; and Jefferson County will be at its heels with a per capita income of about $37,000. In the table below, the forecasts of population and per capita income are combined to estimate total personal income; and a 50% cut has been allocated to the retail expenditure potential. The result is the foundation of a comprehensive supply-demand and gap analysis. In next month’s newsletter, we will take a closer look at transacted retail sales for the two counties, plus a study of net import and export – sometimes referred to as sales “leakage”. Stay tuned for more!
Jefferson Ramsey Ramsey 2025 County County v. Jefferson POP 800,000 585,000 0.73 PCI $37,000 $39,000 1.05 TPI $29.6 billion $22.8 billion 0.77 Retail $14.5 billion $11.5 billion 0.77
Caution #1 - Mixing data sources and different survey methods can be risky business, and especially with smaller geographies. The primary data source (census) should serve as the foundation; and the secondary source should be used only to study the general trends (ACS).
Caution #2 - Tempted to take the shortcut with a “leakage report” purchased from a vendor? Most vendors apply algorithms to national, regional, or statewide numbers. They don’t study the local trends or current events, so the results can be far from reliable or accurate.