Principles of Actuarial Modeling
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Cox Regression Model

Worked Example

An investigation is carried out into popularity of new cars being bought in the showroom of a Mercedes dealer. Data recorded for each car included colour, engine size and car type. A Cox proportional hazards model was fitted to the data and the results are given below:

Covariate   Parameter
Colour Silver 0.5
  Non-silver 0
Size 2.0 Litre Plus 0.35
  Less than 2.0 Litre 0
Type Saloon 0
  Convertible 1.5

Write down the Cox hazard function according to this model. With regards to the model you have written down above state the following:

  • To which class of car does the baseline hazard refer?
  • Which car has the lowest hazard rate?
  • Which car has the highest hazard rate?

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