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It has been often argued that an increase in population of different countries would lead to the deterioration of the economy (Avakov, 2010). This depends on how the government handles the size of country’s population. In some countries there has been reported high population and very low Gross National Product, yet other highly populated countries report high GDP. It is, therefore, important to determine is country’s population a truthful and reliability indicator that can be used to determine its GDP trends. This information would be used to determine whether population increase should be encouraged or discouraged in our modern world.
The objective of this paper is:
To determine whether high population would lead to low GDP.
The hypothesis is:
H1: High population leads to an increase in the Gross Domestic Product of a country.
Ho: Increase in population does not lead to an increase in the Gross Domestic Product of a country.
Internet sources were used to determine different population levels of European countries in 2009 and their corresponding Gross Domestic Products. Ten countries were randomly chosen from the list to avoid bias. Countries were chosen before their respective GDP or populations were determined. In order to have a good representation of the continent choices were made from all its regions. This was done through the use of a compass. Countries from the central, eastern, western, northern, and southern regions were chosen in order to appropriately represent the continent. Data collected from these Internet sources was then recorded as shown in the table below (Table 1). It was then analyzed using Microsoft Excel and a graph was drawn. A line of best fit was then drawn and an equation of the relationship developed. This can be used to project trends in the future or to determine GDPs of countries that were not examined in the research but are located within the region. The region from which all countries were chosen was the same since there are similar conditions and cultures that might affect the whole population in the same way. That is why European countries alone were chosen and not mixed with Asian or African countries that might have largely different conditions that affect both population and GDP. Data used was limited for the year 2011.
Data obtained from Internet sources were recorded as shown in the table below. A graph was then plotted to determine the relationship between the population and GDP in chosen countries (Figure 1). A line of best fit was then plotted on the graph to determine the relationship between two variables.
X-axis represents the population of each of ten countries while y-axis represents Gross Domestic Product of these countries that were used for the research. The graph shows that there is a relationship between population between population level and the size of GDP of the countries studied. A positive relationship was recorded with a gradient of 0.039. This could be translated to the fact that there will be an increase in GDP whenever there is an increase in population. The graph, however, showed that there would be a negative y-intercept. It would cross the y-axis at -12716. This means that if the population was kept at 0, there would be a negative GDP.
The graph can be used to estimate GDP in a country within the region given its population. If a country x has a population of 40 million people, the country should have a GDP of around $ 1.4 billion. This is obtained from the graph. Likewise, the population of a country can be determined by measuring its Gross Domestic Product. If a country has a GDP of $2 billion, its population can be estimated to be at around 56 million.
The findings of this study show that there is a positive relationship between the size of GDP of any country and its population. It was, therefore, determined that hypothesis H1 was supported meaning that higher population leads to the increase in GDP. This can be attributed to the increase in output due to availability of labor in the country. However, the trend may change if we were to consider income per capita of each of the countries.
The study had some weaknesses in that there was no comparison within regions. The area covered was small and may not be a good representation of the whole population of the world. At the same time there are obvious governance differences in each of the countries as well as resources that may have not been covered in the study. However, a significant reliability of the study was achieved due to the recognized sources of data and the analysis carried out on the data. It can, therefore, be stated that increase in country’s population is positively related to the increase of Gross Domestic Product in that country.