We are using an established and robust extrapolation method to project the urban population for the World Urbanization Prospects. The method is based on the urban-rural ratio, which we calculate for the last two empirical data points available - which are typically based on results from two censuses. The urban-rural ratio is directly related to the percentage urban. The calculations are done in two steps:
- First, we calculate the average annual rate of change in the urban-rural ratio between the last two data points. For instance, we might have census results for 2000 and 2010 for a particular country, which indicate that the urban-rural ratio in 2000 was 30/70 and the urban rural ratio in 2010 was 35/65. From these two data points we can calculate an average annual rate of change in the urban-rural ratio for the 2000 to 2010 period. This rate is equivalent to the difference between the rate of change of urban population and the rate of change of the rural population. This rate of change is then extrapolated, assuming that the proportion urban follows a logistic path.
- In a second step we apply what we call the “world norm”. The world norm is estimated for two groups of countries with different population size: 149 countries with 2 million or more inhabitants in 2018 and 82 countries with less than 2 million inhabitants in 2018. The world norm combines empirical urban-rural growth differences within each group within a regression equation. The fitted regression line allows us to calculate a “hypothetical urban-rural growth difference” for each level of an initial observed percentage urban. We can now use the most recent urban-rural growth difference of a particular country (obtained in step 1) and converge it to the hypothetical urban-rural growth difference of all countries of the world (obtained in step 2) over a period of 25 years.
With this procedure, we essentially allow the urbanization process of a particular country to converge towards a worldwide observed pattern of urbanization. In technical terms: the urban-rural growth differences are not kept constant over the projection period, but converge towards the hypothetical urban-rural growth difference for all countries of the world with 2 million or more inhabitants.