Consider our loss-ALAE dataset, and - as in Frees & Valdez (1998) - let us fit a parametric model, in order to price a reinsurance treaty. The dataset is the following,
> library(evd)
> data(lossalae)
> Z=lossalae
> X=Z;Y=Z
...

Visualization is a key to success in regression analysis. This is one of the (many) reasons I am also suspicious when I read an article with a quantitative (econometric) analysis without any graph. Consider for instance the following dataset, obtai...

Tomorrow, we will discuss Fisher-Tippett theorem. The idea is that there are only three possible limiting distributions for normalized versions of the maxima of i.i.d. samples . For bounded distribution, consider e.g. the uniform distribution on t...