Predicting quantity and quality of life with the Future Elderly Model.

TitlePredicting quantity and quality of life with the Future Elderly Model.
Publication TypeJournal Article
Year of Publication2020
AuthorsLeaf, DErmini, Tysinger, B, Goldman, DP, Lakdawalla, D
JournalHealth Economics
Date Published2020 Oct 07
ISSN Number1099-1050
Keywordsforecasting and prediction methods, model evaluation, simulation methods, validation and selection

The Future Elderly Model (FEM) is a microsimulation model designed to forecast health status, longevity, and a variety of economic outcomes. Compared to traditional actuarial models, microsimulation models provide greater opportunities for policy forecasting and richer detail, but they typically build upon smaller samples of data that may mitigate forecasting accuracy. We perform validation analyses of the FEM's mortality and quality of life forecasts using a version of the FEM estimated exclusively on early waves of data from the Health and Retirement Study. First, we compare FEM mortality and longevity projections to the actual mortality and longevity experience observed over the same period of time. We also compare the FEM results to actuarial forecasts of mortality and longevity during the same time. We find that FEM projections are generally in line with observed mortality rates and closely match longevity. Then, we assess the FEM's performance at predicting quality of life and longitudinal outcomes, two features missing from traditional actuarial models. Our analysis suggests the FEM performs at least as well as actuarial forecasts of mortality, while providing policy simulation features that are not available in actuarial models.

Citation Key11123
PubMed ID33026140
Grant ListP30AG024968; R01AG062277 / AG / NIA NIH HHS / United States