Discrete analogues of continuous bivariate probability distributions

Alessandro Barbiero

Annals of Operations Research, 2022, vol. 312, issue 1, No 3, 23-43

Abstract: Abstract In many real-world applications, the phenomena of interest are continuous in nature and modeled through continuous probability distributions, but their observed values are actually discrete and hence it would be more reasonable and convenient to choose an appropriate (multivariate) discrete distribution generated from the underlying continuous model preserving one or more important features. In this paper, two methods are discussed for deriving a bivariate discrete probability distribution from a continuous one by retaining some specific features of the original stochastic model, namely (1) the joint density function, or (2) the joint survival function. Examples of applications are presented, which involve two types of bivariate exponential distributions, in order to illustrate how the discretization procedures work and show whether and to which extent they alter the dependence structure of the original model. We also prove that some bivariate discrete distributions that were recently proposed in the literature can be actually regarded as discrete counterparts of well-known continuous models. A numerical study is presented in order to illustrate how the procedures are practically implemented and to present inferential aspects. Two real datasets, considering correlated discrete recurrence times (the former) and counts (the latter) are eventually fitted using two discrete analogues of a bivariate exponential distribution.

Keywords: Bivariate exponential distribution; Bivariate failure rates; Copula; Correlated counts; Linear correlation; Survival function (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s10479-019-03388-8

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