Part 1 Life insurance companies are keenly interested in predicting how long their customers will...
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Question
Accounting
Part 1
Life insurance companies are keenly interested in predicting how long their customers will live, because their premiums and profitability depend on such numbers. Data were gathered for 100 deceased males, in order to formulate a regression that predicted longevity based on:
* Age at death of the two parents
* Mean age at death of grandfather and grandmothers
Questions
a. Perform a multiple regression analysis and show the prediction equation.
b. Is the model useful at 2.5% significance level?
c. Interpret the coefficients b1 and b2 in this model.
Part 2 (see Longevity (2)
A statistician working for the company suggeted smoking is a major determinant of a person's longevity. He added this variable as a predictor to the first group of independent variables, but also took out the insignificant variables from the previous model of Part 1.
Questions
d. Run the reduced model (that now includes only three independant variavles), and show the prediction equation.
e. Interpret the coefficient of the predictor "Smoker" in this model (that is, if say, the value of this coefficient is 4, what does it mean in this model).
f. A smoker, whose both parents passed at the age of 85 is 62 years old. How many more years is he expected to live?
g. His friend is not a smoker who lost his mother when she was 70 years old, and father when he was 60 years old. How long is he expected to live?
h. Can you determine with 90% confidence which of the two friends will die at a younger age?
Longevity 1:
Longevity
Mother
Father
Gmothers
Gfathers
80
85
78
72
71
73
88
63
76
66
70
66
75
67
57
72
72
67
68
55
79
88
73
64
73
83
90
72
74
62
70
67
65
70
59
72
76
71
74
61
72
66
75
71
63
71
78
64
76
61
67
69
66
61
69
74
71
76
73
60
80
74
77
69
68
63
68
66
67
67
71
70
70
71
67
66
64
66
63
57
74
82
71
75
65
71
71
71
68
62
65
75
60
63
62
74
76
66
66
69
66
69
68
61
65
71
76
67
63
71
73
69
80
64
61
74
79
70
77
60
68
74
62
59
63
77
81
78
73
62
77
85
69
80
65
74
77
69
75
69
68
72
71
72
66
68
75
63
65
65
74
82
66
72
62
71
73
72
68
71
80
84
73
77
68
72
75
61
77
61
77
82
76
71
63
76
88
69
75
67
62
65
57
68
57
70
75
57
67
57
71
72
67
67
64
69
72
63
68
67
73
79
71
74
65
72
77
69
72
65
84
80
90
72
71
73
76
74
69
65
70
78
70
78
54
78
75
74
58
70
82
83
78
77
65
77
75
66
72
60
67
68
69
73
62
72
69
72
69
68
67
67
67
72
66
72
78
64
67
66
75
73
69
71
61
72
71
66
68
68
75
73
73
66
59
80
84
75
71
74
72
78
64
66
61
71
76
61
74
61
71
77
70
73
61
89
86
77
74
69
74
79
71
70
77
72
72
77
71
68
74
78
68
67
72
77
85
77
77
71
77
72
72
63
64
73
67
71
65
69
72
74
64
74
62
65
66
63
72
60
81
82
77
73
69
76
80
70
63
60
64
71
67
66
66
72
73
69
64
67
69
75
67
60
62
59
59
62
68
56
69
73
69
72
53
76
82
65
72
69
63
71
56
61
53
66
74
64
72
63
72
85
60
67
67
68
72
66
65
68
73
80
75
67
67
78
82
72
71
72
83
82
82
76
72
78
82
70
76
64
67
73
62
65
59
70
77
60
69
67
68
74
79
72
65
66
80
63
75
59
75
76
72
69
64
71
71
60
71
66
72
77
64
70
69
71
76
67
66
64
77
79
74
73
70
67
68
68
70
57
68
71
61
66
64
67
76
62
66
62
74
77
64
66
69
70
66
68
63
66
72
78
70
71
64
69
73
60
74
60
Longevity 2:
Gmothers
Gfathers
Smoker
72
71
No
76
66
Yes
67
57
Yes
68
55
Yes
64
73
No
74
62
No
70
59
Yes
74
61
Yes
71
63
Yes
76
61
Yes
61
69
Yes
73
60
No
69
68
No
67
67
Yes
71
67
Yes
63
57
Yes
75
65
No
68
62
Yes
63
62
Yes
66
69
No
61
65
Yes
63
71
Yes
64
61
Yes
77
60
No
59
63
Yes
73
62
No
80
65
No
75
69
Yes
72
66
Yes
65
65
Yes
72
62
No
68
71
Yes
77
68
No
77
61
Yes
71
63
No
75
67
No
68
57
Yes
67
57
Yes
67
64
Yes
68
67
Yes
74
65
Yes
72
65
Yes
72
71
No
69
65
Yes
78
54
Yes
58
70
No
77
65
No
72
60
No
73
62
Yes
69
68
Yes
72
66
Yes
67
66
Yes
71
61
No
68
68
Yes
66
59
No
71
74
No
66
61
Yes
74
61
Yes
73
61
Yes
74
69
No
70
77
No
71
68
Yes
67
72
No
77
71
No
63
64
No
65
69
Yes
74
62
Yes
72
60
Yes
73
69
No
63
60
No
66
66
Yes
64
67
Yes
60
62
Yes
68
56
Yes
72
53
Yes
72
69
No
61
53
Yes
72
63
Yes
67
67
Yes
65
68
Yes
67
67
Yes
71
72
No
76
72
No
76
64
No
65
59
Yes
69
67
Yes
72
65
Yes
75
59
Yes
69
64
No
71
66
Yes
70
69
Yes
66
64
Yes
73
70
No
70
57
Yes
66
64
Yes
66
62
Yes
66
69
No
63
66
Yes
71
64
Yes
74
60
Yes
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