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Bivariate Distribution Regression with Application to Insurance Data

Yunyun Wang, Tatsushi Oka, Dan Zhu

arXiv 23 Mar 2022 · Statistics — Methodology · publishedInsurance Mathematics and Economics (2023) · 5 citations (OpenAlex)

arXiv:2203.12228 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Understanding variable dependence, particularly eliciting their statistical properties given a set of covariates, provides the mathematical foundation in practical operations management such as risk analysis and decision-making given observed circumstances. This article presents an estimation method for modeling the conditional joint distribution of bivariate outcomes based on the distribution regression and factorization methods. This method is considered semiparametric in that it allows for flexible modeling of both the marginal and joint distributions conditional on covariates without imposing global parametric assumptions across the entire distribution. In contrast to existing parametric approaches, our method can accommodate discrete, continuous, or mixed variables, and provides a simple yet effective way to capture distributional dependence structures between bivariate outcomes and covariates. Various simulation results confirm that our method can perform similarly or better in finite samples compared to the alternative methods. In an application to the study of a motor third-party liability insurance portfolio, the proposed method effectively estimates risk measures such as the conditional Value-at-Risk and Expected Shortfall. This result suggests that this semiparametric approach can serve as an alternative in insurance risk management.

Citation extraction

27
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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Czado, C., Kastenmeier, R., Brechmann, E.C., Min, A (2012) A mixed copula model for insurance claims and claim sizes0.92843100%
2Chernozhukov, V., Fernández-Val, I., Melly, B (2013) Inference on counterfactual distributions0.87452100%
3Garrido, J., Genest, C., Schulz, J (2016) Generalized linear models for dependent frequency and severity of insurance claims0.84333100%
4Yang, L (2020) Nonparametric copula estimation for mixed insurance claim data0.73732100%
5van der Vaart, A., Wellner, J (1996) Weak convergence and empirical processes: with applications to statistics0.6936250%
6White, H (1982) Maximum likelihood estimation of misspecified models0.64422100%
7Chernozhukov, V., Fernandez-Val, I., Galichon, A (2009) Improving point and interval estimators of monotone functions by rearrangement0.64422100%
8Klein, N., Hothorn, T., Barbanti, L., Kneib, T (2022) Multivariate conditional transformation models0.64422100%
9Meier, J (2020) Multivariate Distribution Regression0.64422100%
10Praestgaard, J., Wellner, J.A (1993) Exchangeably weighted bootstraps of the general empirical process0.64422100%

Showing the top 10 of 27 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Bivariate distribution regression; theory, estimation and an application to intergenerational mobility0.87462
2Distributional Vector Autoregression: Eliciting Macro and Financial Dependence0.40511
3Regression Adjustment for Estimating Distributional Treatment Effects in Randomized Controlled Trials0.40511
4Practically significant differences between conditional distribution functions0.40511
5Local Gaussian copula inference with structural breaks: testing dependence predictability0.40511