Comparison of Bayesian Random-Effects and Traditional Life Expectancy Estimations in Small-Area Applications

There are several measures that summarize the mortality experience of a population. Of these measures, life expectancies are generally preferred based on their simpler interpretation and direct age standardization, which makes them directly comparable between different populations. However, traditional life expectancy estimations are highly inaccurate for smaller populations and consequently are seldom used in small-area applications. In this paper, the authors compare the relative performance of traditional life expectancy estimation with a Bayesian random-effects approach that uses correlations (i.e., borrows strength) between different age groups, geographic areas, and sexes to improve the small-area life expectancy estimations. In the presented Monte Carlo simulations, the Bayesian random-effects approach outperforms the traditional approach in terms of bias, root mean square error, and coverage of the 95 confidence intervals. Moreover, the Bayesian random-effects approach is found to be usable for populations as small as 2,000 person-years at risk, which is considerably smaller than the minimum of 5,000 person-years at risk recommended for the traditional approach. As such, the proposed Bayesian random-effects approach is well-suited for estimation of life expectancies in small areas.