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Thursday, December 26, 2013

General Commentary: The Global Growth of the Middle Class

   One of the most radical transformations of the 21st century could be the explosive growth of the middle class, especially in countries where virtually no middle class existed until recently.  I am convinced that aside from the many beneficial social and political effects of this change, it will also mean that more people will have the time and money to engage in recreational activities, including hobbies such as stamp collecting.

   According to Ernst and Young, the population of the world's middle class will increase by over 260% from 2009 to 2030, and by that year, two thirds of the middle class will live in the Asia-Pacific region. These trends, along with a concurrent trend toward global aging, have important implications for the philatelic investor.

    The break down of the projections provided by Ernst and Young is interesting: only North America's middle class declines in both absolute terms and as a proportion of the world's population: from 338 million/ 18% (2009) to 322 million/ 7% (2030). Europe's rises slightly in absolute terms but declines proportionately: from 664 million/ 36% to 680 million/ 14%.  It is the developing world which experiences the most dramatic transformation, led by Asia/Pacific: 525 million/28% to 3,228 million/ 66%. Central and South America and the Middle East/North Africa see a dramatic rise in absolute terms along with a corresponding proportionate decline: 181 million/10% to 313 million/6% and 105 million/6% and 234 million/5%, respectively. Sub-Saharan Africa's middle class increases in population by 334%, from 32 million to 107 million, while remaining 2% of the the global total.

   Obviously, these are only projections, and any number of circumstances may render them inaccurate. Furthermore, many other factors may also influence the future growth or decline in demand for a particular country's (or region's) stamps, so the middle class population stats should not be viewed alone when making such predictions.

   Other than the general positive effect of this "rising tide lifting all boats" on the hobby, the demand for certain stamps will be heightened when favorable trends coincide. The greatest increases in demand will be for better issues with popular topics from countries where both the growth of the middle class and aging of the population are occurring most rapidly. 

    The Stamp Auction Bidders and Consignors Union (SABACU) is a forum for discussing stamp auctions, and represents the interests of stamp auction bidders and consignors in their dealings with stamp auctioneers. All stamp collectors and dealers are welcome to join. 

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