Visualizing the Shelf Life of Population Forecasts: A Simple Approach to Communicating Forecast Uncertainty

Abstract

It is widely appreciated that population forecasts are inherently uncertain. Researchers have responded by quantifying uncertainty using probabilistic forecasting methods. Yet despite several decades of development, probabilistic forecasts have gained little traction outside the academic sector. Therefore, this article suggests an alternative and simpler approach to estimating and communicating uncertainty which might be helpful for population forecast practitioners and users. Drawing on the naïve forecasts idea of Alho, it suggests creating “synthetic historical forecast errors” by running a regular deterministic projection model many times over recent decades. Then, borrowing from perishable food terminology, the “shelf life” of forecast variables, the number of years into the future the forecast is likely to remain “safe for consumption” (within a specified error tolerance), is estimated from the “historical” errors. The shelf lives are then applied to a current set of forecasts and presented in a simple manner in graphs and tables of forecasts using color-coding. The approach is illustrated through a case study of 2021-based population forecasts for Australia. It´s concluded that the approach offers a relatively straightforward way of estimating and communicating population forecast uncertainty.