Error assessment of applying foreign life table in Ghana

Abstract

The application of foreign life tables in Ghana has been a major concern for actuaries and other stakeholders. The foreign life tables may not reflect the true Ghanaian mortality rates, as mortality experiences vary greatly between countries due to differences in geography and causes of death. However, an empirical assessment of the foreign life tables that reflect similar mortality rates to the Ghanaian population has not been studied. The objective of the study is to assess the foreign life tables that are similar to Ghanaian settings. A cohort dataset of 3,260 subjects was collected from the University of Ghana Hospital which included the subjects’ cause of death and gender. The study employed the Hotelling’s test and multivariate analysis of variance (MANOVA) to test whether the life tables of UK, USA, and South African populations were similar to the Ghanaian setting. The study revealed that life tables of the UK, USA and South African were significantly different from the Ghanaian mortality experience. Nevertheless, the South African life table was closest to the observed Ghanaian mortality. The study, therefore, recommended that there is a need for Ghana to have her own life table as the foreign life tables are significantly different from the Ghanaian mortality. However, the study recommends that until Ghana successfully constructs her own life table, institutions and agencies such as SSNIT and insurance companies can continue to apply the South African life table with appropriate adjustments.