What Is the Variance of the Number of Claims Filed in a Poisson Distribution?

Click For Summary
SUMMARY

The variance of the number of claims filed in a Poisson distribution can be determined using the relationship between the probabilities of filing two and four claims. Given that policyholders are three times as likely to file two claims as to file four claims, the equation P(2) = 3P(4) leads to the derivation of λ (lambda). The variance is equal to λ, which can be calculated from the equation 4λ² = λ⁴, resulting in λ = 4.

PREREQUISITES
  • Understanding of Poisson distribution and its properties
  • Familiarity with probability mass functions
  • Knowledge of factorial notation and its application in probability
  • Basic algebraic manipulation skills
NEXT STEPS
  • Study the derivation of the Poisson distribution variance
  • Learn about the relationship between different probability distributions
  • Explore advanced topics in actuarial science related to claims modeling
  • Practice solving problems involving conditional probabilities in Poisson distributions
USEFUL FOR

Actuaries, statisticians, students studying probability theory, and anyone interested in understanding claims modeling in insurance contexts.

buzzmath
Messages
108
Reaction score
0

Homework Statement


An actuary has discovered that policyholders are three times as likely to file two claims as to file four claims. If the number of claims filed has a Poisson distribution, what is the variance of the number of claims filed?


2. Homework Equations [/]
P(x)=e^(-lamda)*(lamda^x)/x! Var(x)=lamda


The Attempt at a Solution


I know that P(2)=3P(4) and that P(2)=e^(-lamda)*(lamda^2)/2 and that P(4)=e^(-lamda)*(lamda^4)/4! So I set these equal to find lamda and that is the variance. The solution given to me is P(2)=e^(lamda)*(lamda^2)/2=3*e^(-lamda)*(lamda^4)/4!=3*P(4)*24*lamda^2=6*lamda^4 I don't understand the last two equalities. Any help? where do the 24*lamda^2 comefrom and how do they get 6*lamda^4?
Thanks
 
Physics news on Phys.org
Is this a typo? if so how would I go about solving the problem using the method I've started? or any other way?
Thanks
 
From the given information,
P(2) = \frac{e^{-\lambda}\lambda^2}{2!} = 3P(4) = 3\frac{e^{-\lambda}\lambda^4}{4!}
From this, we get
\frac{e^{-\lambda}\lambda^2}{2} = 3\frac{e^{-\lambda}\lambda^4}{24}
so
\frac{e^{-\lambda}\lambda^2}{2} = \frac{e^{-\lambda}\lambda^4}{8}
or
4e^{-\lambda}\lambda^2} = e^{-\lambda}\lambda^4}
That works out to 4\lambda^2 = \lambda^4
Can you take it from there?

BTW, the name of this Greek letter is lambda.
 

Similar threads

  • · Replies 1 ·
Replies
1
Views
2K
Replies
6
Views
1K
Replies
5
Views
1K
  • · Replies 6 ·
Replies
6
Views
2K
  • · Replies 8 ·
Replies
8
Views
2K
  • · Replies 21 ·
Replies
21
Views
2K
Replies
2
Views
1K
Replies
15
Views
5K
  • · Replies 12 ·
Replies
12
Views
3K
Replies
1
Views
2K