Original Article : Forecasting Mortality Indexes Allowing for Economic Growth Dependence

J Health Info Stat > Volume 40(3); 2015 > Article

J Health Info Stat 2015;40(3):43-53.

Sang Il Lee

ABSTRACT

Objectives:
In this study, we introduce a new forecasting methodology for future mortality rate to capture the long-run dynamics between mortality rates and economic variables, including real gross domestic product (GDP) and real GDP per capita.
Methods:
Using mortality data for South Korean males and females, we show the presence of long-run equilibrium relationships between macroeconomic variables and mortality rates, by implementing the Johansen cointegration methodology. Then their dynamics is modeled by using vector error correction models (VECMs).
Results:
The VECM forecasts show the significant impact of including economic variables on forecasting future mortality, compared with the forecasts obtained by a model with no economic factors, i.e., a random walk with drift.
Conclusions:
Our framework provides a methodology to model the dynamics of mortality rate in consideration of economic variables.

Key words: Mortality rate, Lee-Carter model, Real gross domestic product (GDP), Real GDP per capita, Vector error correction model, VECM