On the Parameter Estimation of Stochastic Catastrophe Model and the Validity of Model

Abstract

This paper describes the parameter estimation method of stochastic catastrophe model based on the maximum likelihood method.This method is compared with the moment method.The appropriateness of these methods is tested and evaluated by means of a likelihood ratio test, AIC(Akaike's Information Criterion)and so on.As a result, it is confirmed that the maximum likelihood method is more effective for estimating parameters of the stochastic catastrophe model.