Preprint

Thirty years on: a review of the Lee-Carter method for forecasting mortality

Basellini, U., Camarda, C. G., Booth, H.
SocArxiv papers
25 pages.
SocArXiv
originally posted on: 21 August 2022 (2022), unpublished
Open Access
Reproducible

Abstract

The introduction of the Lee-Carter (LC) method marked a breakthrough in mortality forecasting, providing a simple yet powerful data-driven stochastic approach. The method has the merit of capturing the dynamics of mortality change  by a single time index that is invariably linear. This 30th anniversary review of its 1992 publication examines the LC method and the large body of research that it has since spawned. We first describe the method and present a 30-year ex-post evaluation of the original LC forecast for U.S.~mortality. We then review the most prominent extensions of the LC method in relation to the limitations that they sought to address. With a focus on the efficacy of the various extensions, we review existing evaluations and comparisons. To conclude, we juxtapose the two main statistical approaches used, discuss further issues, and identify several potential avenues for future research.

Keywords: comparative analysis, forecasts, mortality, time series
The Max Planck Institute for Demographic Research (MPIDR) in Rostock is one of the leading demographic research centers in the world. It's part of the Max Planck Society, the internationally renowned German research society.