GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Selection Bias


Synonyms:choice, favouritism, inclination
Filed Under: financial-banking, insurance, investments
Tags: banking, insurance, investment
 

Definition of selection bias

selection bias
1. An error made in statistical analysis whereby non-random data is injected into a given dataset. Due to flaws in the sample selection process, biased or flawed data in a statistical analysis can produce inaccurate results. Economists, statisticians, and actuaries attempt to avoid selection bias when conducting their work.

Related Terms and Acronyms:

  • actuarial table   A table used in actuarial science that outlines the statistical probability that an individual of a specific age and sex will die within a year.
  • concealment   The act of lying or omitting information when applying for insurance coverage.
  • self-selection bias   A selection bias that occurs when individuals join a sample group voluntarily.
  • survival analysis   A statistical analysis of how likely someone or something will survive to a set date.
  • ultimate mortality table   A mortality table that does not include information from people who have been approved for life insurance recently.
  • underlying mortality assumption   A measurement of death rates that is used to estimate pension obligations and insurance premiums.
  • unsolicited application   An application for insurance made directly by an individual as opposed to an application made by a broker or agent.
  • yearly probability of dying   The likelihood that an individual of a certain age and gender will die within a year.
  • yearly probability of living   The likelihood that an individual of a certain age and gender will still be alive after a year has passed.

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