Topic5 - Life Insurance Example: (nknw364.sas) Y = the...

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Life Insurance Example: (nknw364.sas) Y = the amount of life insurance for the 18 managers (in $1000) X1 = average annual income (in $1000) X2 = risk aversion score (0 – 10)
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Life Insurance: Input, diagnostics title1 'Insurance' ; data insurance; infile 'I:\My Documents\Stat 512\CH09TA01.DAT' ; input income risk amount; run ; proc print data =insurance; run ; *diagnostics; title2 'residual plots' ; symbol1 v =circle c =black; proc reg data =insurance; model amount = income risk/ r p ;
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Life Insurance: Initial Regression Sum of Mean Source DF Squares Square F Value Pr > F Model 2 173919 86960 542.33 <.0001 Error 15 2405.14763 160.34318 Corrected Total 17 176324 Root MSE 12.66267 R-Square 0.9864 Dependent Mean 134.44444 Adj R-Sq 0.9845 Coeff Var 9.41851 Parameter Standard Variable DF Estimate Error t Value Pr > |t|
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Life Insurance: Scatter plot
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Life Insurance – Residual Plots
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Life Insurance – Residual Plots (cont)
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Life Insurance: Partial Regression Plots (1) proc reg data =insurance; model amount=income risk/ partial ; id income risk; run ;
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Life Insurance: Partial Regression Plots (1) „ƒƒƒƒˆƒƒƒƒƒˆƒƒƒƒƒˆƒƒƒƒƒˆƒƒƒƒƒˆƒƒƒƒƒˆƒƒƒƒƒˆƒƒƒƒƒˆƒƒƒƒƒˆƒƒƒƒƒˆƒƒƒƒƒˆƒƒƒƒƒˆƒƒƒƒƒˆƒƒƒƒƒˆƒƒƒƒƒ† 250 ˆ 7 ˆ 200 ˆ ˆ 150 ˆ ˆ 7 amount ‚ 100 ˆ 7 ˆ 6
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Life Insurance: Partial Regression Plots (2) risk title1 'Partial residual plot' ; title2 'for risk' ; symbol1 v =circle i =rl; axis1 label =( 'Risk Aversion Score' ); axis2 label =( angle = 90 'Amount of Insurance' ); proc reg data =insurance; model amount risk = income; output out =partialrisk r =resamt resrisk; proc gplot data =partialrisk; plot resamt*resrisk / haxis =axis1 vaxis =axis2 vref = 0 ; run ;
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Life Insurance: Partial Regression Plots (2) risk (cont)
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Life Insurance: Partial Regression Plots (2) income axis3 label =( 'Income' ); title2 'for income' ; proc reg data =insurance; model amount income = risk; output out =partialincome r =resamt resinc; proc gplot data =partialincome; plot resamt*resinc / haxis =axis3 vaxis =axis2 vref = 0 ; run ;
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Life Insurance: Partial Regression Plots (2) income (cont)
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Life Insurance: Quadratic data quad; set insurance; sinc = income; proc standard data =quad out =quad mean = 0 ; var sinc; data quad; set quad; incomesq = sinc*sinc; title1 'Residuals for quadratic model' ; proc reg data =quad; model amount = income risk incomesq / r p ; plot r. *( p. income risk incomesq);
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(regression) Sum of Mean Source DF Squares Square F Value Pr > F Model 3 176249 58750 10958.0 <.0001 Error 14 75.05895 5.36135 Corrected Total 17 176324 Root MSE 2.31546
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Topic5 - Life Insurance Example: (nknw364.sas) Y = the...

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