Comparison Between Lee-Carter Model And Negative Binomial Regression Model In Forecasting Male Mortality Data Of Usa(1980-2020)

Abstract

People living in America today are living longer compared to yester years; this is due to reduced mortality rates and increase in life expectancy. According to (Dye & Williams, 2010) generally mortality rates have continuously been declining over the years. However, other courses of death like suicide rate have been soaring high for the last 25 years which is a worrying trend for both the state and the insurance providers. According to the study report conducted between 2011 and 2012 by (Hoyert & Xu, 2012) they recorded an improvement in life expectancy by 0.1 years from 78.7 to 78.8 years. This was due to the improvement in the health sector in the country. This constant change in mortality rates is proving to be a challenge to the insurance industry and pension providers in designing the right products for their consumers. In this thesis we are going to compare two predictive models, the Negative Binomial Regression model and Lee-Carter model to determine which model gives a better t in forecasting male mortality of the USA.