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Discrete lognormal distributions with application to insurance data

Abstract

The continuous lognormal distribution has been used to model discrete count data, which is clearly not appropriate. In this paper, we introduce two discrete versions of the continuous lognormal distribution. We study their mathematical properties and estimation issues. Two real data applications show superior performance of the discrete versions over the continuous counter parts.

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Acknowledgements

The authors would like to thank the editor and the three referees for careful reading and comments which greatly improved the paper.

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Correspondence to Saralees Nadarajah.

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We have complied with all ethical standards. Research did not involve human participants and/or animals.

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Lyu, J., Nadarajah, S. Discrete lognormal distributions with application to insurance data. Int J Syst Assur Eng Manag (2021). https://doi.org/10.1007/s13198-021-01443-x

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Keywords

  • Maximum likelihood
  • Moments
  • Simulation