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Forecasting UK Ratings Numbers

Forecasting UK Ratings Numbers. Proposed Methodology D. Glen & J. Dowden. Background. UK Officer data significantly improved Ratings information still limited New surveys will provide information on stock of ratings by department, age, gender data on ratings wastage rates.

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Forecasting UK Ratings Numbers

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  1. Forecasting UK Ratings Numbers Proposed Methodology D. Glen & J. Dowden

  2. Background • UK Officer data significantly improved • Ratings information still limited • New surveys will provide information on • stock of ratings by department, age, gender • data on ratings wastage rates

  3. The Proposed Model • Based on the one developed for UK Officer Projections • Essentially a stock model adjusted for entry and exit assumptions • S - stock of ratings, E = entry rate, w = % of ratings of age i who leave

  4. i + (1 - w ) 64 i S (E S = Fit) t+1 t + 1 i = 16 Formula

  5. Previous Performance

  6. Ratings Projections • Scenario 1 • Entry a fixed proportion of existing stock (4%) • Wastage also 4% • Implies decline in numbers because of Age Profile • Two retirement ages - 65 or 57

  7. Scenario 1

  8. Scenario 2 • Assume 100 new ratings per year aged 17-20 • Wastage rates • 20 < 40 - 6% per year • 40 + - 1% per year • Two retirement ages - 65 or 57

  9. Scenario 2 (Age 65)

  10. Scenario 2 (Age 57)

  11. Scenario Comparisons • Projections to 2010 sensitive to different assumptions about wastage/retirement • Age 65 • Scenario 1 - fall of 7.7% • Scenario 2 - rise of 1.1% • Age 57 • Scenario 1 - fall of 13.8% • Scenario 2 - rise of 1.4%

  12. Conclusions • Scenario simulation suggests forecasts are sensitive to key assumptions • Very important to obtain accurate wastage data if this model is to be employed • Future work will involve calibrating the model with empirical wastage data from future surveys

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