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2018 ACTL3141 Midsem UNSW Solutions

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Mid-Term ExamSession 1, 2018

SOLUTIONS

1

Question 1 [24 marks]

a. [4 marks ]

A 5-year select-and-ultimate mortality table is a table where mortality depends both on

age and age at entry (or selection) to the group, [x]. . After the selection period, 5 years

in this case, the lives experience the ultimate mortality .

b. [9 mark ] Derive and compute the following quantities and explain in words what each of

these quantities represents:

i. [4 marks ] p = = = 0.9980

l[62]+2 1998

This is the probability that a policyholder who is aged [62] + 1 and bought a life

[62]+1 l[62]+1 2002

ii. [5 marks ] q = p − p = − =

3|2 [60]+1 3 [60]+1 5 [60]+1

l[60]+4 l66 2286−2091

= 0.08471

This is the probability that a policyholder who is age [60] + 1 and bought a life

l[60]+1 l[60]+1 2302

c. [6 mark ] As the force of mortality is constant within each integer age x and x + 1, we

have p = e = . Then µ = − log = 0.0015 .

[65]

−µ[65] l[65]+1

l[65] [65]

l[65]+1

l[65]

d. [5 mark ]

e[60]+4 = p[60]+4 (1 + e[60]+5 )

l[60]+5

= (1 + e65 )

l[60]+4

2276

= (1 + 19.5) = 20.41

2281

2

Question 2 [31 marks]

a. [4 marks ] Type II right censoring as the study was terminated after a pre-determined

number of failures. Random censoring of the phone which exploded.

b. [4 marks ] We have

d1 d2

ŜKM (12) = 1− 1−

n1 n2

2 3

= 1− 1−

12 10

= 0.5833

c. [4 marks ] We have d = 2 as there were two phones that ran out of battery at time

t = 16.

3

3

14.

3 2 2 2

1 − 0.3889 = 61.11% of phones would be expected to run-out of battery before 18 hour

KM

e. [6 marks ] We can assume that eventually all phones will run out of battery.

It could thus be reasonable to assume that Ŝ (t) either goes to 0 at t = 24 or that it

decays from Ŝ (24) = 0.2917 and eventually reaches 0.

KM

KM

f. [9 marks ] Since Samsung estimate Ŝ (24) = 0.2917 is dierent from the 0.2727 reported

by the subcontractor, her story is internally inconsistent.

KM

been tested at the start, a no phone being censored.

Since in this case there are no censored observation before t = 24 and there were 11

phones tested and 3 still running at t = 24, we have Ŝ (24) = 3/11 = 0.2727.

KM

Alternatively, one can do the KM table with only 11 phone and no censoring.

j t n d Ŝ (t )

1 9 11 2 0.8182

j j j KM j

2 12 9 3 0.5454

3 16 6 2 0.3636

4 24 4 1 0.2727

3

Question 3 [16 marks]

Z12

χ2 =

V ar(Z1 )

(−0.4 − 0.4286 + 0.8889 − 0.5 − 0.5)2

=

0.24 + 0.2449 + 0.4321 + 0.25 + 0.25

(−0.93968)2

=

1.41700

= 0.62315.

0.6 is the 56.14%-ile of such a distribution (see page 164 of the formula book), the p-value

is around 44% , which means that we cannot reject the null hypothesis that the hazard

rates for surgery and immunotherapy are the same. Comparisons against the critical

value were also accepted.

b. [8 marks ] We can use the following Cox-regression

λ(t; z) = λ0 (t) exp (βz) ,

where z = 1 if the patient is treated with surgery and z = 0 if treated with immunotherapy

.

With this model we can get an estimate β̂ using pMLE which would measure the eect

of type of treatment on survival times.

We can then either:

• Construct a condence interval, say at 95%, on β using the standard errors and if

these interval contains 0 then dierence between treatments is not signicant and if

it does not contain 0 then the hazard rates of the two treatment are dierent .

• Test the null hypothesis β = 0 using the Wald test or the log-likelihood ratio test.

If this hypothesis is rejected then there is evidence of a dierence in the hazard rates

between the dierent treatments.

In the above, details such as the expressions for the test statistics or the distribution of

the statistic under the null hypothesis were required for full marks.

4

Question 4 [29 marks]

at age 18.

1 2 3

b. [6 marks ] Holding the other covariates constant, having work experience increases the

hazard of nding a job by a factor of e = e = 1.1709 on averagethat is, increases

βˆ2 ˆ

0.1578

Similarly, any additional year of age at graduation multiplies the hazard of nding a job

by a factor of e = e = 0.9807, a decrease of about 2 percent.

βˆ3 −0.0194

c. [8 marks ] The relative risk of a male student aged 24 at graduation who has work expe-

rience with respect to a women aged 23 at graduation and who has no work experience

is: λ (t; z = (1, 1, 24))

r= = eβ1 +β2 +β3 = 1.2231

λ (t; z = (0, 0, 23))

Therefore the probability that a men aged 24 with work experience has not found a job

after 1 year is:

S (1; z = (1, 1, 24)) = [S (1; z = (0, 0, 23))]r

= 0.41.2231

= 0.3260

d. [8 marks ] A suitable statistical test is the log likelihood test . The null hypothesis is that

the coecient of the new term representing international/domestic is zero.

We compare the model with and without the extra parameter. If the log-likelihoods for the

two models are L and L respectively, then the test statistic is −2(L −L ).

with without without with

This test statistic has a chi-squared distribution with one degree of freedom (since we

only need one parameter to code international/domestic students).

If the test statistic is greater than 3.84 (the chi-squared critical value at 95% with 1 degree

of freedom), we reject the null hypothesis and conclude that the international/domestic

term does not improve the model.

e. [4 marks ] The log cumulative hazard between men and women don't look parallel and

crossover. This suggests that the proportional hazard assumption for the gender covariate

is invalid.

End of Paper

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