A COMPARISON OF PARAMETRIC MORTALITY MODELS TO GRADUATE URBAN AND RURAL MORTALITY

Abstract

This study examine twenty-nine parametric mortality models and assess their
suitability for graduating mortality rates of urban and rural areas in Pakistan.
Grouped age specific mortality rates of rural and urban populations for the
year 2019 are used. The data is collected from the website of National
Institute of Population Studies which conduct Maternal Mortality Survey in
Pakistan on regular basis. The parametric mortality models were applied to
rural and urban mortality data. We used R software to estimate the model’s
parameters and assess their suitability for urban and rural populations. The
suitability of these models was assessed by using 3 different loss functions.
Our analyses found that the fourth type of Heligman-Polard’s model with
loss function 3 provides reliable results for graduating the mortality of rural
population while second type of Carriere model with loss function 3 produce
best results for graduating the urban mortality of Pakistan. Based on two
models, mortality rates of urban and rural population have been graduated
over age range 0-85. We suggest the use the graduated mortality rates of
urban and rural areas for pricing life insurance products in rural and urban
areas respectively. In addition, graduated mortality rates are also suggested
for use in calculation of life insurance liabilities.