Inflation modelling - Nth largest method - part 5 - effect of volatility

We've been playing around in the last few posts with the 'Nth largest' method of analysing claims inflation. I promised previously that I would look at the effect of increasing the volatility of our severity distribution when using the method, so that's what we are going to look at today. Interestingly it does have an effect, but it's actually quite a subdued one as we'll see.

I'm running out of  ideas for photos relating to inflation, so here's a cool random photo of New York instead. Photo by Ronny Rondon

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