Applying Lee-Carter under conditions of variable mortality decline

Heather Booth*, John Maindonald, Len Smith

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    306 Citations (Scopus)

    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.

    Original languageEnglish
    Pages (from-to)325-336
    Number of pages12
    JournalPopulation Studies
    Volume56
    Issue number3
    DOIs
    Publication statusPublished - Nov 2002

    Fingerprint

    Dive into the research topics of 'Applying Lee-Carter under conditions of variable mortality decline'. Together they form a unique fingerprint.

    Cite this