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Modeling and Forecasting Mortality Using the Lee-Carter Model for Indian Population Based on Decade-wise Data

Authors:

Rajendra N. Chavhan ,

Department of Statistics and Actuarial Science, School of Mathematical Sciences, North Maharashtra University, Jalgaon Jalgaon-425001, Maharashtra, IN
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Ramkrishna L. Shinde

Department of Statistics and Actuarial Science, School of Mathematical Sciences, North Maharashtra University, Jalgaon Jalgaon-425001, Maharashtra, IN
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Abstract

The stochastic mortality model given by Lee and Carter (1992) has been used in literature for fitting and forecasting the human mortality. We have modeled mortality rates of Indian population using the Lee-Carter (LC) model based on decade-wise data available separately for Indian female and male populations in the form of life tables for the period 1901-2011. The Singular Value Decomposition (SVD) approach is used for estimation of the parameters of the LC model. Forecasted values of time dependent parameter  of the LC model are obtained for next five decades using best fitted auto regressive integrated moving average (ARIMA) model. Forecasted values of life expectancy at different ages with 95% confidence intervals are also reported for the next five decades. As an application, using forecasted mortality rates for the next five decades, net single premium for whole life and term insurance, actuarial present values of life annuities for some selected ages are also evaluated
How to Cite: Chavhan, R.N. & Shinde, R.L., (2016). Modeling and Forecasting Mortality Using the Lee-Carter Model for Indian Population Based on Decade-wise Data. Sri Lankan Journal of Applied Statistics. 17(1), pp.51–68. DOI: http://doi.org/10.4038/sljastats.v17i1.7845
Published on 28 Apr 2016.
Peer Reviewed

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