Are the dimensions of private information more multiple than expected? Information asymmetries in the market of supplementary private health insurance in England

Our study reexamines standard econometric approaches for the detection of information asymmetries on insurance markets. We claim that evidence based on a standard framework with 2 equations, which uses potential sources of information asymmetries, should stress the importance of heterogeneity in the parameters. We argue that conclusions derived from this methodology can be misleading if the estimated coefficients in such an `unused characteristics' framework are driven by different parts of the population. We show formally that an individual's expected risk from the perspective of insurance, conditioned on certain characteristics (which are not used for calculating the risk premium), can equal the population's expectation in risk { although such characteristics are both related to risk and insurance probability, which is usually interpreted as an indicator of information asymmetries. We provide empirical evidence on the existence of information asymmetries in the market for supplementary private health insurance in the UK. Overall, we found evidence for advantageous selection into the private risk pool; ie people with lower health risk tend to insure more. The main drivers of this phenomenon seem to be characteristics such as income and wealth. Nevertheless, we also found parameter heterogeneity to be relevant, leading to possible misinterpretation if the standard `unused characteristics' approach is applied

Modelling the joint distribution of competing risks survival times using copula functions

The problem of modelling the joint distribution of survival times in a competing risks model, using copula functions is considered. In order to evaluate this joint distribution and the related overall survival function, a system of non-linear differential equations is solved, which relates the crude and net survival functions of the modelled competing risks, through the copula. A similar approach to modelling dependent multiple decrements was applied by Carriere (1994) who used a Gaussian copula applied to an incomplete double decrement model which makes it difficult to calculate any actuarial functions and draw relevant conclusions. Here, we extend this methodology by studying the effect of complete and partial elimination of up to four competing risks on the overall survival function, the life expectancy and life annuity values. We further investigate how different choices of the copula function affect the resulting joint distribution of survival times and in particular the actuarial functions which are of importance in pricing life insurance and annuity products. For illustrative purposes, we have used a real data set and used extrapolation to prepare a complete multiple decrement model up to age 120. Extensive numerical results illustrate the sensitivity of the model with respect to the choice ofcopula and its parameter(s)

Constraint-based probabilistic learning of metabolic pathways from tomato volatiles

Clustering and correlation analysis techniques have become popular tools for the analysis of data produced by metabolomics experiments. The results obtained from these approaches provide an overview of the interactions between objects of interest. Often in these experiments, one is more interested in information about the nature of these relationships, e.g., cause-effect relationships, than in the actual strength of the interactions. Finding such relationships is of crucial importance as most biological processes can only be understood in this way. Bayesian networks allow representation of these cause-effect relationships among variables of interest in terms of whether and how they influence each other given that a third, possibly empty, group of variables is known. This technique also allows the incorporation of prior knowledge as established from the literature or from biologists. The representation as a directed graph of these relationship is highly intuitive and helps to understand these processes. This paper describes how constraint-based Bayesian networks can be applied to metabolomics data and can be used to uncover the important pathways which play a significant role in the ripening of fresh tomatoes. We also show here how this methods of reconstructing pathways is intuitive and performs better than classical techniques. Methods for learning Bayesian network models are powerful tools for the analysis of data of the magnitude as generated by metabolomics experiments. It allows one to model cause-effect relationships and helps in understanding the underlying processes

Total Variation Regularized Tensor RPCA for Background Subtraction from Compressive Measurements

Background subtraction has been a fundamental and widely studied task in video analysis, with a wide range of applications in video surveillance, teleconferencing and 3D modeling. Recently, motivated by compressive imaging, background subtraction from compressive measurements (BSCM) is becoming an active research task in video surveillance. In this paper, we propose a novel tensor-based robust PCA (TenRPCA) approach for BSCM by decomposing video frames into backgrounds with spatial-temporal correlations and foregrounds with spatio-temporal continuity in a tensor framework. In this approach, we use 3D total variation (TV) to enhance the spatio-temporal continuity of foregrounds, and Tucker decomposition to model the spatio-temporal correlations of video background. Based on this idea, we design a basic tensor RPCA model over the video frames, dubbed as the holistic TenRPCA model (H-TenRPCA). To characterize the correlations among the groups of similar 3D patches of video background, we further design a patch-group-based tensor RPCA model (PG-TenRPCA) by joint tensor Tucker decompositions of 3D patch groups for modeling the video background. Efficient algorithms using alternating direction method of multipliers (ADMM) are developed to solve the proposed models. Extensive experiments on simulated and real-world videos demonstrate the superiority of the proposed approaches over the existing state-of-the-art approaches.Comment: To appear in IEEE TI

Advancing functional connectivity research from association to causation

Cognition and behavior emerge from brain network interactions, such that investigating causal interactions should be central to the study of brain function. Approaches that characterize statistical associations among neural time series-functional connectivity (FC) methods-are likely a good starting point for estimating brain network interactions. Yet only a subset of FC methods ('effective connectivity') is explicitly designed to infer causal interactions from statistical associations. Here we incorporate best practices from diverse areas of FC research to illustrate how FC methods can be refined to improve inferences about neural mechanisms, with properties of causal neural interactions as a common ontology to facilitate cumulative progress across FC approaches. We further demonstrate how the most common FC measures (correlation and coherence) reduce the set of likely causal models, facilitating causal inferences despite major limitations. Alternative FC measures are suggested to immediately start improving causal inferences beyond these common FC measures