Probabilistic household forecasts based on register data - the case of Denmark and Finland

BACKGROUND Household forecasts are important for public planning and for predicting consumer demand. OBJECTIVE The purpose of this paper is to compute probabilistic household forecasts for Finland and Denmark, taking advantage of unique housing register data covering the whole populations dating back to the 1980s. A major advantage is that we do not have to rely on small population samples, and we can get quite reliable estimates even for infrequent transitions. A further merit is having time series containing the population in different household positions (dependent child, living with a spouse, living in a consensual union, living alone, lone parent, living in other private household and institutional households) by age and sex. METHODS These series enable us to estimate the uncertainty in the future distribution of the population across household positions. Combining these uncertainty parameters with expected shares computed in a deterministic household forecast, we simulate 3000 sample paths for the household shares for each age and sex. These paths are then combined with 3000 simulations from a stochastic population forecast covering the same period to obtain the predicted number of households and persons in each household position by age and sex. RESULTS According to our forecasts, we expect a strong growth in the number of private households during a 30-year period, of 27% in Finland and 13% in Denmark. The 1 Corresponding author. Department of Economics, University of Oslo, P.O. Box 1095, 0317 Oslo. E-mail: [email protected]. 2 Department of Economics, University of Oslo. Christiansen & Keilman: Probabilistic household forecasts based on register data 1264 http://www.demographic-research.org number of households consisting of a married couple or a person who lives alone are the most certain, and single parents and other private households are the most uncertain.