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Market Sizing Beginner Level

Cédric asked on Aug 08, 2018 - 1 answer

Hey there, I struggle with this basic market sizing reasoning:

Assume that, on average, a Chinese woman has 2 babies in her lifetime (pregnancy: 18 months = 1½ years). If we assume a life expectancy of 75 years, then we have on average 2% of all female population pregnant at a given time (1.5 years/75years).

What I get: 2 percent of her lifeTIME spends a Chinese women being pregnant on avg.
What I don't get: why can we equal this 2% of an average lifetime with 2 percent of the female population pregnant at a given time.

I really don't get the reasoning behind it. Are there implicit assumptions not stated here? I would be very happy for some easy, clear (and alternative) examples to get the reasoning.

Sidi replied on Aug 08, 2018
McKinsey Engagement Manager & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 60+ candidates secure MBB offers

The implicit assumption that is missing from your outline is that the female population is evenly distributed over the the life expectancy. From that assumption you can conclude that the probability of any random woman in the sample being pregnant is 2% (hint: this is true independent of whether we assume a constraint in the possible age of pregnancy or not - the statement will be true in either case if we base it on the entire female population).

Cheers, Sidi

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