Applying Lee-Carter under conditions of variable mortality decline

2002/01/01 by HEATHER BOOTH, Heather Booth, JOHN MAINDONALD +3 · 6 citations
Social Sciences · Health Professions · Environmental Science · #Insurance, Mortality, Demography, Risk Management #Global Health Care Issues #Climate Change and Health Impacts

paper · doi:10.1080/00324720215935

Abstract

The Lee-Carter method of mortality forecasting assumes an invariant age component and most applications have adopted a linear time component. The use of the method with Australian data is compromised by significant departures from linearity in the time component and changes over time in the age component. We modify the method to adjust the time component to reproduce the age distribution of deaths, rather than total deaths, and to determine the optimal fitting period in order to address non-linearity in the time component. In the Australian case the modification has the added advantage that the assumption of invariance is better met. For Australian data, the modifications result in higher forecast life expectancy than the original Lee-Carter method and official projections, and a 50 per cent reduction in forecast error. The model is also expanded to take account of age-time interactions by incorporating additional terms, but these are not readily incorporated into forecasts.

Cited by

• Mortality Forecasting as a Flow Field in Tucker Decomposition Space
• A Compositional Approach to Modelling Cause-specific Mortality with Zero Counts
• Forecasting Population in an Uncertain World: Approaches, New Uses, and Troubling Limitations
• Stochastic frailty models for modeling and forecasting mortality
• Forecasting sub-population mortality using credibility theory
• Mortality Forecasting using Factor Models: Time-varying or Time-invariant Factor Loadings?

Related

• A simple model of mortality trends aiming at universality: Lee Carter + Cohort
• Probabilistic Mortality Forecasting with Varying Age-Specific Survival Improvements
• Mortality Forecasting using Factor Models: Time-varying or Time-invariant Factor Loadings?
• Forecasting Mortality Rates: A Linear Mixed-Effects Model
• Deepening Lee-Carter for longevity projections with uncertainty estimation