Paper Discussion: Modeling Coherent Mortality Forecasts using the Framework of Lee-Carter Model Sharon S. Yang, Jack C. Yue, Yi-Pi Chang, Yu-Yun Yeh, 2009 Discussed by Raimond Maurer, Goethe University, Frankfurt, Germany September, 2009, NYC

Motivation & Methods Motivation: Extending the LC Model: Combing data in similar countries by using common factors Model: (1)LC: Modeling the mortality rates of a single population; Coherent LC: common factors/same period parameter for a group of populations. (2) Parameter Estimation: MLE (3)Evaluation model fitting (in-sample) and forecasting (out-sample)

Contribution & Conclusion Model fitting: “combining the data of Canada and U.S. is more appropriate than combining male and female data in either Canada or U.S.”; Model forecasting: “the coherent model suggests that combining two countries would get a better result than combining male and female, except that the coherent gender model has a better forecast performance for the females in Canada”

Review & Question & To Do Figure 3, p. 9,Beta: Beta in a single population model is almost constant across all the age groups, which isn’t consistent with the “increasing of stability in coherent model”-statement; increasing of stability: economic interpretation? Major object is to avoid long-run divergence in mean mortality forecasts. But how well the coherent model can achieve this goal is not clearly shown; The differences between Li and Lee (2005), PMC, (henceforth LL) are not clear: Coherent mortality modeling: as used in LL; Two coherent models: country group (USA&Canada)  15 low-mortality countries in LL; gender group (USA&Canada) ~ Sweden; Estimation method: OLS  MLE, advantage and disadvantage? Table 1: “Country” model performs worse than “Gender” for “0~29”; Two panels in Figure 6 are difficult to differ; Eq. (2.2): Level of mortality (k) is independent of country (j) and gender (i); but “Equation (2.2) allows each population has its own age pattern and level of mortality”.  inconsistent Cairns, Blake, and Dowd (2009) on page 3 is missing.