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International Journal of Mathematical Analysis and Applications

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A New Approach to Stochastic Modeling and Fitting Mortality Risk

International Journal of Mathematical Analysis and Applications
Vol.1 , No. 4, Publication Date: Oct. 27, 2014, Page: 68-72

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Authors

[1]	Bamidele Moyosola, Department of Statistics, University of Ilorin, PMB 1515, Ilorin, Nigeria.
[2]	Adejumo Olusola, Department of Statistics, University of Ilorin, PMB 1515, Ilorin, Nigeria.
[3]	Oyebayo Olaniran, Department of Statistics, University of Ilorin, PMB 1515, Ilorin, Nigeria.

Abstract

Most mortality models often suffer from one problem or another which in turn make them inappropriate for a particular country or for a particular age group. In this paper, we proposed three new models alongside with new fitting method using Ridge regression. The models captured the developed countries mortality improvement structure and the developing countries limited data mortality structure. To demonstrate the new approach, a review of some robust existing models was done and a quantitative comparison between the proposed models and the existing models was also achieved. Results from monte-carlo simulation revealed the supremacy of the proposed models over the existing models. The Bayesian Information Criteria (BIC), Log-likelihood and Root Mean Square error of Prediction (RMSEP) were used for the model comparison.

Keywords

Mortality, Stochastic, Modelling, Ridge Regression

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