Abstract

Errors from past rounds of population projections can provide both diagnostic information to improve future projections as well as information for users on the likely uncertainty of current projections. This paper assesses the forecast accuracy of official Australian Bureau of Statistics (ABS) population projections for the states and territories of Australia and is the first major study to do so. For the states and territories, it is found that, after 10-year projection durations, absolute percentage errors lie between about 1% and 3% for the states and around 6% for the territories. Age-specific population projections are also assessed. It is shown that net interstate migration and net overseas migration are the demographic components of change which contributed most to forecast error. The paper also compares ABS projections of total population against simple linear extrapolation, finding that, overall, ABS projections just outperformed extrapolation. No identifiable trend in accuracy over time is detected. Under the assumption of temporal stability in the magnitude of error, empirical prediction intervals are created from past errors and applied to the current set of ABS projections. The paper concludes with a few ideas for future projection rounds.

Highlights

  • Population projections for states, provinces, statistical regions, and other major subnational areas are produced periodically by government agencies for a variety of planning purposes

  • This paper has evaluated the forecast accuracy of twelve sets of Australian Bureau of Statistics (ABS) state and territory population projections, covering the 1978- to the 2006-based rounds

  • (i) Errors in forecasting total population were generally modest for the states, with absolute percentage errors at projection durations of 10 years averaging around 1–3%, but quite large for the two territories, at roughly 6% after 10 years

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Summary

Introduction

Population projections for states, provinces, statistical regions, and other major subnational areas are produced periodically by government agencies for a variety of planning purposes. The purpose of this paper is to determine how well ABS state and territory projections performed as forecasts of future population and to make use of past forecast errors to create predictive distributions for the current round of ABS projections. The paper aims to provide the first detailed analysis of ABS state and territory forecast error and uncertainty as well as to contribute a new subnational-scale case study to the international literature Particular features of this analysis which are rare in the literature include an examination of errors by age group and a focus on error distributions as well as averages. Findings which provide answers to the first four research questions are the focus of Section 3, whilst Section 4 attempts to apply distributions of past errors to the current set of ABS state and territory projections in the form of empirical prediction intervals. The conclusions consist of a summary of key findings, lessons learnt from this evaluation, and some suggestions for further research

Data and Methods
Forecast Error
Empirical Prediction Intervals for Current Projections of Total Population
Findings
Summary and Conclusions
Full Text
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