A more meaningful parameterization of the Lee-Carter model. (English) Zbl 1452.91267

Summary: A new Lee-Carter model parameterization is introduced with two advantages. First, the Lee-Carter parameters are normalized such that they have a direct and intuitive interpretation, comparable across populations. Second, the model is stated in terms of the “needed-exposure” (NE). The NE is the number required in order to get one expected death and is closely related to the “needed-to-treat” measure used to communicate risks and benefits of medical treatments. In the new parameterization, time parameters are directly interpretable as an overall across-age NE. Age parameters are interpretable as age-specific elasticities: percentage changes in the NE at a particular age in response to a percent change in the overall NE. A similar approach can be used to confer interpretability on parameters of other mortality models.


91G05 Actuarial mathematics
91D20 Mathematical geography and demography


Human Mortality
Full Text: DOI


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