Modeling and Forecasting Mortality with Economic, Environmental and Lifestyle Variables

Traditional stochastic mortality models tend to extrapolate, to focus on identifying trends in mortality without explaining them. Those that do link mortality with other variables usually limit themselves to GDP. This article presents a novel stochastic mortality model that incorporates a wide range of variables related to economic, environmental, and lifestyle factors to predict mortality. The model uses principal components derived from these variables in an extension of the Niu and Melenberg (2014) model and is applied to 37 countries from the Human Mortality Database. Model fit is superior to the Lee-Carter model for 18 countries. The forecasting accuracy of the proposed model is better than that of the Niu-Melenberg model for half of the countries analyzed under various jump-off years. The model is designed to facilitate scenario building and policy planning, providing insights into the interplay between different factors that affect mortality