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Can population projections be used for sensitivity tests on policy models?

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Abstract

Many policy models require assumptions about future population trends. Sensitivity tests for these assumptions are normally carried out by comparing population projection variants. This paper outlines some of the conditions that variant-based sensitivity tests must meet if they are to be informative. It then describes four common situations where these conditions are not met, so that conventional sensitivity tests are not informative. The solution, the paper argues, is stochastic population projections.

Suggested Citation

  • John Bryant, 2003. "Can population projections be used for sensitivity tests on policy models?," Treasury Working Paper Series 03/07, New Zealand Treasury.
    • Handle: RePEc:nzt:nztwps:03/07
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    File URL: https://treasury.govt.nz/sites/default/files/2007-09/twp03-07.pdf
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    1. Tuljapurkar, Shripad, 1992. "Stochastic population forecasts and their uses," International Journal of Forecasting, Elsevier, vol. 8(3), pages 385-391, November.
    2. Wolfgang Lutz & Warren Sanderson & Sergei Scherbov, 2001. "The end of world population growth," Nature, Nature, vol. 412(6846), pages 543-545, August.
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    Cited by:

    1. John Bryant, 2003. "The Ageing of the New Zealand Population, 1881-2051," Treasury Working Paper Series 03/27, New Zealand Treasury.
    2. Dunstan Kim & Ball Christopher, 2016. "Demographic Projections: User and Producer Experiences of Adopting a Stochastic Approach," Journal of Official Statistics, Sciendo, vol. 32(4), pages 947-962, December.

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    More about this item

    Keywords

    Demography; Sensitivity testing; Population projections; Policy modelling;
    All these keywords.

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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