Describe how changes in the parameters affect the distributions.

Free SOA Exam ASTAM (Advanced Short-Term Actuarial Mathematics) lesson in Severity Models. 9 min read, ~1,412 words.

Scale parameter: multiplying by gives the same family with. The k-th moment scales by. CV and skewness unchanged. Shape parameter (or ) controls tail thickness, skewness, and hazard direction, independent of scale; for Pareto, gamma, and Weibull, higher shape thins the tail. Gamma CV is: higher lowers CV and makes...