IDEAS home Printed from https://ideas.repec.org/a/gam/jrisks/v9y2021i11p203-d675754.html
   My bibliography  Save this article

Subnational Mortality Modelling: A Bayesian Hierarchical Model with Common Factors

Author

Listed:
  • Qian Lu

    (School of Statistics, Renmin University of China, Beijing 100872, China)

  • Katja Hanewald

    (School of Risk & Actuarial Studies and Australian Research Council Centre of Excellence in Population Ageing Research (CEPAR), UNSW Sydney, Sydney, NSW 2052, Australia)

  • Xiaojun Wang

    (School of Statistics, Renmin University of China, Beijing 100872, China
    Center for Applied Statistics, Renmin University of China, No. 59 Zhongguancun Street, Haidian District, Beijing 100872, China)

Abstract

We propose a new model in a Bayesian hierarchical framework to project mortality at both national and subnational levels based on sparse or missing data. The new model, which has a country–region–province structure, uses common factors to pool information at the national level and within regions consisting of several provinces or states. We illustrate the model’s use by drawing on a new database containing provincial-level mortality data for China from four censuses conducted during the period 1982–2010. The new model provides good estimates and reasonable forecasts at both the country and provincial levels. The model’s forecast intervals reflect provincial- and regional-level uncertainty. Using subnational data for the period 1999–2018 from the Centers for Disease Control and Prevention (CDC), we also apply the model to the United States. We use mortality forecasts to compute and compare national and subnational life expectancies for China and the United States. The model predicts that, in 2030, China will have a similar national life expectancy at age 60 and a similar heterogeneity in subnational life expectancy as the United States.

Suggested Citation

  • Qian Lu & Katja Hanewald & Xiaojun Wang, 2021. "Subnational Mortality Modelling: A Bayesian Hierarchical Model with Common Factors," Risks, MDPI, vol. 9(11), pages 1-21, November.
  • Handle: RePEc:gam:jrisks:v:9:y:2021:i:11:p:203-:d:675754
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-9091/9/11/203/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2227-9091/9/11/203/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fung, Man Chung & Peters, Gareth W. & Shevchenko, Pavel V., 2017. "A unified approach to mortality modelling using state-space framework: characterisation, identification, estimation and forecasting," Annals of Actuarial Science, Cambridge University Press, vol. 11(2), pages 343-389, September.
    2. Lee,Ron & Sanchez-Romero,Miguel, 2019. "Overview on Heterogeneity in Longevity and Pension Schemes," Social Protection Discussion Papers and Notes 136560, The World Bank.
    3. Marie-Pier Bergeron-Boucher & Vladimir Canudas-Romo & James E. Oeppen & James W. Vaupel, 2017. "Coherent forecasts of mortality with compositional data analysis," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 37(17), pages 527-566.
    4. Carl P. Schmertmann & Marcos R. Gonzaga, 2018. "Bayesian Estimation of Age-Specific Mortality and Life Expectancy for Small Areas With Defective Vital Records," Demography, Springer;Population Association of America (PAA), vol. 55(4), pages 1363-1388, August.
    5. Kevin Dowd & Andrew Cairns & David Blake & Guy Coughlan & Marwa Khalaf-Allah, 2011. "A Gravity Model of Mortality Rates for Two Related Populations," North American Actuarial Journal, Taylor & Francis Journals, vol. 15(2), pages 334-356.
    6. Ansley Coale & Judith Banister, 1994. "Five decades of missing females in China," Demography, Springer;Population Association of America (PAA), vol. 31(3), pages 459-479, August.
    7. Huang, Fei, 2017. "Mortality forecasting using a modified CMI Mortality Projections Model for China II: cities, towns and counties," Annals of Actuarial Science, Cambridge University Press, vol. 11(1), pages 46-66, March.
    8. Rob Hyndman & Heather Booth & Farah Yasmeen, 2013. "Coherent Mortality Forecasting: The Product-Ratio Method With Functional Time Series Models," Demography, Springer;Population Association of America (PAA), vol. 50(1), pages 261-283, February.
    9. Huang, Fei & Browne, Bridget, 2017. "Mortality forecasting using a modified Continuous Mortality Investigation Mortality Projections Model for China I: methodology and country-level results," Annals of Actuarial Science, Cambridge University Press, vol. 11(1), pages 20-45, March.
    10. Ansley Coale & Shaomin Li, 1991. "The Effect of Age Misreporting in China on the Calculation of Mortality Rates at Very High Ages," Demography, Springer;Population Association of America (PAA), vol. 28(2), pages 293-301, May.
    11. Kleinow, Torsten, 2015. "A common age effect model for the mortality of multiple populations," Insurance: Mathematics and Economics, Elsevier, vol. 63(C), pages 147-152.
    12. Czado, Claudia & Delwarde, Antoine & Denuit, Michel, 2005. "Bayesian Poisson log-bilinear mortality projections," Insurance: Mathematics and Economics, Elsevier, vol. 36(3), pages 260-284, June.
    13. Monica Alexander & Emilio Zagheni & Magali Barbieri, 2017. "A Flexible Bayesian Model for Estimating Subnational Mortality," Demography, Springer;Population Association of America (PAA), vol. 54(6), pages 2025-2041, December.
    14. Yi Zeng & James W. Vaupel, 2003. "Oldest Old Mortality in China," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 8(7), pages 215-244.
    15. Andrew Fenelon & Michel Boudreaux, 2019. "Life and Death in the American City: Men’s Life Expectancy in 25 Major American Cities From 1990 to 2015," Demography, Springer;Population Association of America (PAA), vol. 56(6), pages 2349-2375, December.
    16. Kogure Atsuyuki & Kitsukawa Kenji & Kurachi Yoshiyuki, 2009. "A Bayesian Comparison of Models for Changing Mortalities toward Evaluating Longevity Risk in Japan," Asia-Pacific Journal of Risk and Insurance, De Gruyter, vol. 3(2), pages 1-22, April.
    17. Jackie Li, 2014. "An application of MCMC simulation in mortality projection for populations with limited data," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 30(1), pages 1-48.
    18. Joop de Beer, 2012. "Smoothing and projecting age-specific probabilities of death by TOPALS," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 27(20), pages 543-592.
    19. Johnny Siu‐Hang Li & Kenneth Q. Zhou & Xiaobai Zhu & Wai‐Sum Chan & Felix Wai‐Hon Chan, 2019. "A Bayesian approach to developing a stochastic mortality model for China," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 182(4), pages 1523-1560, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Basellini, Ugofilippo & Camarda, Carlo Giovanni & Booth, Heather, 2023. "Thirty years on: A review of the Lee–Carter method for forecasting mortality," International Journal of Forecasting, Elsevier, vol. 39(3), pages 1033-1049.
    2. Basellini, Ugofilippo & Camarda, Carlo Giovanni & Booth, Heather, 2022. "Thirty years on: A review of the Lee-Carter method for forecasting mortality," SocArXiv 8u34d, Center for Open Science.
    3. Jarner, Søren F. & Jallbjørn, Snorre, 2020. "Pitfalls and merits of cointegration-based mortality models," Insurance: Mathematics and Economics, Elsevier, vol. 90(C), pages 80-93.
    4. Katrien Antonio & Anastasios Bardoutsos & Wilbert Ouburg, 2015. "Bayesian Poisson log-bilinear models for mortality projections with multiple populations," Working Papers Department of Accountancy, Finance and Insurance (AFI), Leuven 485564, KU Leuven, Faculty of Economics and Business (FEB), Department of Accountancy, Finance and Insurance (AFI), Leuven.
    5. Blake, David & El Karoui, Nicole & Loisel, Stéphane & MacMinn, Richard, 2018. "Longevity risk and capital markets: The 2015–16 update," Insurance: Mathematics and Economics, Elsevier, vol. 78(C), pages 157-173.
    6. Blake, David & Cairns, Andrew J.G., 2021. "Longevity risk and capital markets: The 2019-20 update," Insurance: Mathematics and Economics, Elsevier, vol. 99(C), pages 395-439.
    7. Schinzinger, Edo & Denuit, Michel M. & Christiansen, Marcus C., 2016. "A multivariate evolutionary credibility model for mortality improvement rates," Insurance: Mathematics and Economics, Elsevier, vol. 69(C), pages 70-81.
    8. Bernard Baffour & James Raymer, 2019. "Estimating multiregional survivorship probabilities for sparse data: An application to immigrant populations in Australia, 1981–2011," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 40(18), pages 463-502.
    9. Nhan Huynh & Mike Ludkovski, 2021. "Joint Models for Cause-of-Death Mortality in Multiple Populations," Papers 2111.06631, arXiv.org.
    10. Hong Li & Yang Lu & Pintao Lyu, 2021. "Coherent Mortality Forecasting for Less Developed Countries," Risks, MDPI, vol. 9(9), pages 1-21, August.
    11. Leung, Melvern & Fung, Man Chung & O’Hare, Colin, 2018. "A comparative study of pricing approaches for longevity instruments," Insurance: Mathematics and Economics, Elsevier, vol. 82(C), pages 95-116.
    12. Man Chung Fung & Gareth W. Peters & Pavel V. Shevchenko, 2017. "Cohort effects in mortality modelling: a Bayesian state-space approach," Papers 1703.08282, arXiv.org.
    13. Li, Hong & Shi, Yanlin, 2021. "Forecasting mortality with international linkages: A global vector-autoregression approach," Insurance: Mathematics and Economics, Elsevier, vol. 100(C), pages 59-75.
    14. Kenneth Wong & Jackie Li & Sixian Tang, 2020. "A modified common factor model for modelling mortality jointly for both sexes," Journal of Population Research, Springer, vol. 37(2), pages 181-212, June.
    15. Jackie Li & Leonie Tickle & Nick Parr, 2016. "A multi-population evaluation of the Poisson common factor model for projecting mortality jointly for both sexes," Journal of Population Research, Springer, vol. 33(4), pages 333-360, December.
    16. Wang, Pengjie & Pantelous, Athanasios A. & Vahid, Farshid, 2023. "Multi-population mortality projection: The augmented common factor model with structural breaks," International Journal of Forecasting, Elsevier, vol. 39(1), pages 450-469.
    17. Shang, Han Lin & Haberman, Steven & Xu, Ruofan, 2022. "Multi-population modelling and forecasting life-table death counts," Insurance: Mathematics and Economics, Elsevier, vol. 106(C), pages 239-253.
    18. Queiroz, Bernardo L & Gonzaga, Marcos Roberto & Nogales, Ana Maria & Torrente, Bruno & de Abreu, Daisy Maria Xavier, 2019. "Life expectancy, adult mortality and completeness of death counts in Brazil and regions: comparative analysis of IHME, IBGE and other researchers estimates of levels and trends," OSF Preprints pj3sx, Center for Open Science.
    19. de Jong, Piet & Tickle, Leonie & Xu, Jianhui, 2020. "A more meaningful parameterization of the Lee–Carter model," Insurance: Mathematics and Economics, Elsevier, vol. 94(C), pages 1-8.
    20. Tom Wilson & Irina Grossman & Monica Alexander & Phil Rees & Jeromey Temple, 2022. "Methods for Small Area Population Forecasts: State-of-the-Art and Research Needs," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 41(3), pages 865-898, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jrisks:v:9:y:2021:i:11:p:203-:d:675754. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.