On the importance of being uncertain: forecasting population futures for Australia

Knowledge of population futures is central to a wide range of policy and planning issues. Population projections have traditionally been the source of this knowledge, but projections are merely what-if scenarios, based on unrealistic assumptions without claim as to their probability of occurrence. Stochastic population forecasts provide a best estimate of the future population with a prediction interval. Based on stochastic forecasts of population components, a population forecast allows for changes in the level and pattern of these components while correctly taking correlations between them into account. Stochastic forecasts provide consistent prediction intervals for all population indices. These advantages of stochastic forecasts are illustrated with respect to the Australian population, in particular with respect to ageing and migration. Copyright. Monash University and the author/s