Bayesian one-sample prediction of future observations under Pareto distribution

Abstract

Suppose that the length of time in years for which a business operates until failure has a Pareto distribution. Let t ₁ < t ₂ < ··· < t _r denote the survival lifetimes of the first r of a random sample of n businesses. Bayesian predictions are to be made on the ordered failure times of the remaining (n − r) businesses, using the conditional probability function. Numerical examples are given to illustrate our results.

Keywords:

• Bayesian prediction bounds
• One-sample problem
• Type II censoring
• Pareto type II distribution

The authors would like to thank the referees for their helpful remarks and corrections which improved the original manuscript.