Projecting U.S. Household Changes with a New Household Model

O'Neill, B.C. & Jiang, L. (2007). Projecting U.S. Household Changes with a New Household Model. IIASA Interim Report. IIASA, Laxenburg, Austria: IR-07-017

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Abstract

Anticipating changes in number, size, and composition of households is an important element of many issues of social concern. To facilitate continued progress in these areas, an efficient household projection model with moderate data requirements, manageable complexity, explicit accounting for the effects of demographic events, and output that includes the most important household characteristics is needed. None of the existing modelling approaches meets all these needs. This study proposes a new type of headship rate model that projects changes in age- and size-specific headship rates by accounting for the effect of changes in population age structure, changes in the age structure of household heads, and the effect of demographic events. We compare model results to historical data on the last 100 years of experience in the United United States, and to results from a projection over the next 100 years using the dynamic household model ProFamy. Results show that the new model is a substantial improvement over the commonly used constant headship rate approach. A simplified version of the model that does not require projecting the effect of changes in demographic events on headship rates appears to produce reasonably accurate projections of the composition of the population by household size and age of the household head.

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