A model considering the inter-dependence between the age and usage of a system

What is it about?

This paper proposes a copula-based method to model. It is developed based on the following observations on the tail dependence between age and usage of a product. (1) If the age of the product is small, its usage should be small. This is because the age is the calendar time and it is not possible to develop large cumulative usage within a short period of the calendar time. Another reason is due to the operating limit, for example, a car usually cannot be driven faster than 100 miles per hour, hence the usage within a time interval is limited. (b) If the age is large, on the other hand, the usage can be small. For example, some cars are not frequently used. Hence, although they are very old, their mileage can be very small.

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Why is it important?

The paper suggests that ignoring the tail-dependence between age and usage may lead to biased decision making.