Can machine learning improve small area population forecasts? A forecast combination approach

Abstract

Generating accurate small area population forecasts is vital for governments and businesses as it provides better grounds for decision making and strategic planning of future demand for services and infrastructure. Small area population forecasting faces numerous challenges, including complex underlying demographic processes, data sparsity, and short time series due to changing geographic boundaries. In this paper, we propose a novel framework for small area forecasting which combines proven demographic forecasting methods, an exponential smoothing based algorithm, and a machine learning based forecasting technique. The proposed forecasting combination contains four base models commonly used..