Estimating rate of occurrence of rare events with empirical bayes: A railway application

John Quigley, Tim Bedford and Lesley Walls

Reliability Engineering and System Safety, 2007, vol. 92, issue 5, 619-627

Abstract: Classical approaches to estimating the rate of occurrence of events perform poorly when data are few. Maximum likelihood estimators result in overly optimistic point estimates of zero for situations where there have been no events. Alternative empirical-based approaches have been proposed based on median estimators or non-informative prior distributions. While these alternatives offer an improvement over point estimates of zero, they can be overly conservative. Empirical Bayes procedures offer an unbiased approach through pooling data across different hazards to support stronger statistical inference.

Keywords: Empirical Bayes; Credibility theory; Zero failure; Estimation; Homogeneous Poisson process (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reensy:v:92:y:2007:i:5:p:619-627

DOI: 10.1016/j.ress.2006.02.007

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