Anu College of Arts & Social Sciences

Continuing increases in life expectancy beyond previously-held limits have brought to the fore the critical importance of mortality forecasting. Significant developments in mortality forecasting since 1980 are reviewed under three broad approaches: expectation, extrapolation and explanation. Expectation is not generally a good basis for mortality forecasting as it is subjective; expert expectations are invariably conservative. Explanation is restricted to certain causes of death with known determinants. Decomposition by cause of death poses problems associated with the lack of independence among causes and data difficulties. Most developments have been in extrapolative forecasting, and make use of statistical methods rather than models developed primarily for age-specific graduation. Methods using two-factor models (age-period or age-cohort) have been most successful. The two-factor LeeCarter method, and in particular its variants, have been successful in terms of accuracy, while recent advances have improved the estimation of forecast uncertainty. Regression-based (GLM) methods have been less successful due to nonlinearities in time. Three-factor methods are more recent; the Lee-Carter age-period-cohort model appears promising. Specialized software has been developed and made available. Research needs include further comparative evaluations of methods in terms of the accuracy of the point forecast and its uncertainty, encompassing a wide range of mortality situations.