The 2011 Economic and Product Market Databook for Arica, Chile

In performing various economic analyses for its clients, I have occasionally been asked to investigate the market potential for various products and services in Chile. The purpose of this study is to understand the density of demand within Chile and the extent to which Arica might be used as a point of distribution within Latin America. From an economic perspective, however, Arica does not represent a population within rigid geographical boundaries, rather, it represents an area of dominant influence over markets in adjacent areas. This influence varies from one industry to another, but also from one period of time to another.

In what follows, I summarize the economic potential for Arica over the next five years for hundreds of industries, categories and products. The goal of this report is to report the real economic potential, or what an economist calls the latent demand, represented by Arica when defined as an area of dominant influence. The reader needs to realize that latent demand may or may not represent real sales. For many items, latent demand is clearly observable in sales, as in the case for food or housing items. Consider, however, the category "satellite launch vehicles". Clearly, there are no launch pads in Arica used by the space industry to launch satellites. However, the core benefit of the vehicles (e.g. telecommunications, etc.) is "consumed" by the area served by Arica. Without Arica, in other words, the market for satellite launch vehicles would be lower for the population in Chile, Latin America, or the world in general. One needs to allocate, therefore, a portion of the worldwide economic demand for launch vehicles to both Latin America and Arica.