The Convergence and Robustness of Cohort Extensions of Mortality Models
AbstractThe prediction of future of future lifespans of society is known to be very difficult to predict. The most efficient and effective method at the moment of writing is known as the Lee Carter model. However, it has been debated that the intrinsic simplicity of the Lee Carter model and its non-usage of societal trends is not too simple for a complex process such as the average lifespan of currently living people. A strong argument and example can be found in (un)healthy habits of society like smoking and exercise. The simplicity of the Lee Carter model extended with a more abstract form of this structural information gives rise to the cohort extended mortality models. And, although the explanatory power and the underlying rationality might theoretically be valid, in practice it appears that this extension of the model makes the fitting procedure more complex and thus affects the robustness of the model negatively. A possible solution was proposed by Hunt and Villegas (2016) and applied in this paper. Although the theoretical aspect of their solution seems valid, the empirical results show that it is a step in the right direction, but not yet a perfect solution.