Abstract
Reliable mortality forecasts are an essential component of healthcare policies in ageing societies. The Lee–Carter method and its later variants are widely accepted probabilistic approaches to mortality forecasting, due to their simplicity and the straightforward interpretation of the model parameters. This model assumes an invariant age component and linear time component for forecasting. We apply the Lee–Carter method on smoothed mortality rates obtained by LASSO-type regularization and hence adjust the time component with the observed lifespan disparity. Smoothing with LASSO produces less error during the fitting period than do spline-based smoothing techniques. As a more informative indicator of longevity, matching with lifespan disparity makes the time component more reflective of mortality improvements. The forecasts produced by the new method were more accurate during out-of-sample evaluation and provided optimistic forecasts for many low-mortality countries.
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Data used in study are freely accessible from Human Mortality Database.
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Acknowledgements
The authors are grateful to Dr. Christina Bohk-Ewald, Professor Heather Booth, Dr. Carlo-Giovanni Camarda, Professor Vladimir Canudas-Romo, Dr. Alyson van Raalte and two anonymous reviewers for their constructive comments and discussions on this paper. The authors thank researchers at the Department of Statistical Sciences, University of Padua and School of Demography, Australian National University for their many helpful comments and for useful discussions which have helped improve this work.
Funding
We acknowledge support from MIUR–PRIN 2017 project—grant 20177BRJXS Unfolding the SEcrets of LongEvity: Current Trends and future prospects (SELECT). A path through morbidity, disability and mortality in Italy and Europe—in the preparation of the final article.
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Rabbi, A.M.F., Mazzuco, S. Mortality Forecasting with the Lee–Carter Method: Adjusting for Smoothing and Lifespan Disparity. Eur J Population 37, 97–120 (2021). https://doi.org/10.1007/s10680-020-09559-9
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DOI: https://doi.org/10.1007/s10680-020-09559-9