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Posts feedOver-dispersion (reprise for actuaries)
In my previous post I illustrated the effects of over-dispersion in population data. Of course, an actuary could quite properly ask: why use ONS data?
Over-dispersion
Actuaries need to project mortality rates into the far future for calculating present values of pension and annuity liabilities. In an earlier post Stephen wrote about the advantages of stochastic projection methods. One method we might try is the two-dimensional P-spline method with the simple assumption that the number of deaths at age i in year j follows a Poisson distribution (Brouhns, et al, 2002). Figure 1 shows observed and fitted log mortalities for the cross-section of the