A Note on Pareto-Type Distributions Parameterized by Its Mean and Precision Parameters

Marcelo Bourguignon, Diego I. Gallardo and Héctor J. Gómez
Additional contact information
Marcelo Bourguignon: Departamento de Estatística, Universidade Federal do Rio Grande do Norte, Natal 59078-970, RN, Brazil
Diego I. Gallardo: Departamento de Matemática, Facultad de Ingeniería, Universidad de Atacama, Copiapó 1530000, Chile
Héctor J. Gómez: Departamento de Ciencias Matemáticas y Físicas, Facultad de Ingeniería, Universidad Católica de Temuco, Temuco 4780000, Chile

Mathematics, 2022, vol. 10, issue 3, 1-8

Abstract: Pareto-type distributions are well-known distributions used to fit heavy-tailed data. However, the standard parameterizations used for Pareto-type distributions are poorly suited to modeling. On this note, we suggest new parameterizations that are better suited to the purpose. In addition, we propose many regression models where the response variable is Pareto-type distributed using new parameterizations that are indexed by mean and precision parameters. The main motivation for these new parametrizations is the useful interpretation of the regression coefficients in terms of the mean and precision, as is usual in the context of regression models. The parameter estimation of these new models is performed, based on the maximum likelihood paradigm. Some numerical illustrations of the estimators are presented with a discussion of the obtained results. Finally, we illustrate the practicality of the new models by means of two applications to real data sets.

Keywords: pareto-type distributions; modeling; parameterization; varying precision (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.mdpi.com/2227-7390/10/3/528/pdf (application/pdf)
https://www.mdpi.com/2227-7390/10/3/528/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jmathe:v:10:y:2022:i:3:p:528-:d:744349

Access Statistics for this article

Mathematics is currently edited by Ms. Emma He

More articles in Mathematics from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().