Actuarial Mathematics
An additive model is a statistical representation where the overall effect is modeled as the sum of individual components, allowing for the decomposition of a time series into its constituent parts. This approach is particularly useful in forecasting, as it helps to isolate trends, seasonal patterns, and irregular fluctuations within data, making it easier to analyze and predict future values. By using an additive model, one can assess how each component contributes to the overall outcome without interactions complicating the analysis.
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