Evaluating the forecast accuracy and bias of alternative population projections for states

Abstract

Many different techniques can be used for making population projections. Most fall into four general categories: trend extrapolation, ratio extrapolation, cohort-component and structural. Techniques within these categories differ considerably in terms of their complexity and sophistication. A common perception among producers (and users) of population projections is that complex and/or sophisticated techniques produce more accurate forecasts than simple and/or naive techniques. In this paper we test the validity of that perception by evaluating the forecast accuracy and bias of eight commonly used projection techniques drawn from the four categories mentioned above. Using data for state population projections from a number of different time periods, we find no evidence that complex and/or sophisticated techniques produce more accurate or less biased forecasts than simple, naive techniques.