Bayesian inference for a common scale parameter of several Pareto populations

ABSTRACT

This article deals with the problem of Bayesian inference concerning the common scale parameter of several Pareto distributions. Bayesian hypothesis testing of, and Bayesian interval estimation for, the common scale parameter is given. Numerical studies including a comparison study, a simulation study, and a practical application study are given in order to illustrate our procedures and to demonstrate the performance, advantages, and merits of the Bayesian procedures over the classical and generalized variable procedures.

KEYWORDS:

• Bayesian hypothesis testing
• common scale parameter
• credible intervals
• Gibbs sampling
• Pareto distribution

MATHEMATICS SUBJECT CLASSIFICATION:

• 62F03
• 62F10
• 62F15
• 62F40

Acknowledgments

The author is greatly indebted to the anonymous referee and the editor-in-chief whose constructive and thoughtful comments on the earlier draft led to greater improvements in the paper's content. Furthermore, the author is grateful to acknowledge that HTTP requests data from the University of Saskatchewan's WWW server and the University of Calgary's Department of Computer Science WWW server in Example 3 are used with the kind permission of, and are provided by, Dr. Mark Crovella, professor and chair, Department of Computer Science, Boston University, Boston, Massachusetts, USA.