Forecasting disability: application of a frailty model

Joelle H. Fong, Michael Sherris and James Yap

Scandinavian Actuarial Journal, 2017, vol. 2017, issue 2, 125-147

Abstract: Random changes in individual frailty occur due to the stochastic processes of physical deterioration or environmental influences. This paper implements a stochastic ageing model using maximum likelihood methods and calibrates the model to more than 30 years of historical Australian mortality data in order to examine cohort and gender differences in health-state distributions among older adults. We find that frailty levels have declined over time for both male and female cohorts. Nonetheless, patterns of frailty are different between genders. Older females experience a faster pace of health deterioration than their male counterparts causing them to move quicker into worse states of health. Health states are also more heterogeneous among women than men. Population-level estimates suggest that the number of elderly Australians requiring aged care services will exceed that projected under governmental assumptions by 2050.

Date: 2017
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DOI: 10.1080/03461238.2015.1092168

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