Stochastic population forecasts and their uses

The properties and uses of stochastic forecasts are discussed here. For linear stochastic projections, the paper shows how the computation of forecast moments and the statistical distribution of forecasts depend on the multiplicative and autoregressive structure of the dynamics. Both scalar and vector projection methods are discussed, and their similarities are explored. Next the paper discusses the uses of stochastic forecasts, arguing that it is important to relate forecasts to the specific decision-making criteria of particular forecast users. The example of Social Security is used to show how a dynamic programming approach may be used to explore alternative decisions in a probabilistic context.