Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/107909
Authors: 
Fang, Lei
Härdle, Wolfgang K.
Year of Publication: 
2015
Series/Report no.: 
SFB 649 Discussion Paper 2015-007
Abstract: 
Based on the Lee-Carter (LC) model, the benchmark in population forecasting, a variety of extensions and modifications are proposed in this paper. We investigate one of the extensions, the Hyndman-Ullah (HU) method and apply it to Asian demographic data sets: China, Japan and Taiwan. It combines ideas of functional principal component analysis (fPCA), nonparametric smoothing and time series analysis. Based on this stochastic approach, the demographic characteristics and trends in different Asian regions are calculated and compared. We illustrate that China and Japan exhibited a similar demographic trend in the past decade. We also compared the HU method with the LC model. The HU method can explain more variation of the demographic dynamics when we have data of high quality, however, it also encounters problems and performs similarly as the LC model when we deal with limited and scarce data sets, such as Chinese data sets due to the substandard quality of the data and the population policy.
Subjects: 
Functional principal component analysis
Nonparametric smoothing
Mortality forecasting
Fertility forecasting
Asian demography
Lee-Carter model
Hyndman-Ullah method
JEL: 
C14
C32
C38
J11
J13
Document Type: 
Working Paper

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