Demographic future of Serbia from a different angle
Authors: Nikitovic Vladimir 
Published: February 2014

Based on the assessment of the empirical errors in the official population
forecasts of Serbia, the paper shows why forecast users might want a change
of the current official concept. The article consists of three parts. The
first gives a brief chronological overview of the methods and hypotheses in
the official population forecasts of Serbia during the last 60 years. The
second refers to the quantification of the past forecast errors in projecting
total fertility rate, life expectancy at birth and total population aiming at
assessment of the empirical variability. The third part shows the
probabilistic population forecast of Serbia based on Bayesian hierarchical
models of vital components, as implemented in the 2012 revision of United
Nations World population prospects. The empirical error served as an
evaluation tool of the probabilistic distributions of total population. In
spite of the increased availability and quality of input data and developing
of advanced projection techniques during the period, there was no obvious
improvement noted neither in accuracy nor in the expression of the
uncertainty inherent to forecasting in the official population forecasts in
Serbia up to date. In general, fertility has been overestimated while
improvements in mortality have been underestimated. It has been shown that
accuracy largely depends on the stability of demographic processes throughout
the projection horizon, which confirms findings from similar studies in other
countries. The uncertainty in the demographic trends remains a major
challenge for forecasters. A typical judgment that the smallest error will be
made if a recently observed trend is assumed to continue has been linked to
the low fertility variant in the past Serbian forecasts. The target level of
the medium fertility, interpreted as "most likely" outcome, was firmly bound
to replacement fertility until recently thus reflecting desirable rather than
realistic future. Therefore, the reversal in the trend of the total
population of Serbia came as a surprise or much earlier than expected for the
forecasters. The probabilistic population forecast of Serbia provides results
that users can clearly understand and use along with attached information on
error magnitude. Before running the projection model, it was necessary to
adjust the 2012 UN estimates for Serbia to suit the current official
estimates and recent relevant studies on demographic trends in the country.
The comparison of probabilistic hypotheses and results with the current
official projection aims to highlight the key benefits of the new approach in
terms of reduced subjectivity, improved accuracy and quantified uncertainty.
The latter could be particularly relevant for decision makers allowing them
to calculate the expected costs involved in wrong decisions. From the
perspective of the forecast based on "UN model", the strong optimism of the
current official projection appears to be groundless. Besides, the empiric
evaluation of the probabilistic distributions of total population suggests
that it fully reflects the pattern of observed uncertainty in the past
forecasts of Serbian population.