An Econometric Model for Forecasting Regional Population Growth

Abstract

"An econometric model for forecasting net migration and natural increase is proposed and then estimated using time-series data for Texas. The model is simulated five years out-of-sample and found to be quite accurate in forecasting future population growth. It outperforms simpler prediction methods, thus indicating that explicit modeling of net migration and natural increase is superior to modeling only total population."

An Econometric Approach for Modeling Population Change in Doña Ana County, New Mexico

“…Least squares regression analysis is used to quantify the various components of population growth. Separate models for the components of population change often exhibit greater forecast accuracy (Plaut, 1981). Out-of-sample simulations are used to examine if that is also the case for Doña Ana County.…”

“…Some research indicates that modeling natural increase and net migration separately improves forecast accuracy (Plaut, 1981). However, regional and local data on the components of population change are sometimes incomplete.…”

“…In particular, time-series data on migration at the county level are limited and data disaggregated into cohorts are not always available. Measuring births and deaths is a more straightforward process because yearly changes are less severe (Plaut, 1981). In the absence of complete data, net migration can be calculated as a residual by subtracting natural increase from population change (Shryock & Siegel, 1980).…”

“…Plaut (1981) suggests using simple natural increase models because changes to births and deaths usually occur in relatively gradual manners. The simple birth and death specifications of Fullerton and Barraza de Anda (2008) that include local and national trends display good statistical diagnostics.…”

“…Although migrants are risk averse, wage premiums induce mobility even if faced with the probability of being unemployed. Using a modified Harris-Todaro model, Plaut (1981) finds that net migration to Texas is positively affected by the probability of obtaining employment, which is proxied by the ratio of job vacancies to the number of unemployed persons. Similarly, Fullerton et al (2014) Peach and Williams (1994) use decennial data from the United States Census Bureau to extrapolate future population trends in Doña Ana County.…”