Bayes Estimation of Pareto Distribution Based on Type II Censored Data under the Weighted LINEX Loss Function

Authors

Hassabelrasul Yousuf AL Tom Shihabeldeen, Department of Business Administration, College of Humanities and Science in Aflaj, Prince Sattam Bin Abdulaziz University, AL Aflaj, Saudi ArabiaFollow
Fuad S. Al-Duais, Mathematics Department, College of Humanities and Science in Al Aflaj, Prince Sattam Bin Abdulaziz University, Al Aflaj, Saudia ArabiaFollow

Author Country (or Countries)

Saudi Arabia

Abstract

The main objective of this article is to develop a linear exponential function risks in Saudi banks (LINEXLF) to estimate the shape parameter, reliability, and hazard rate functions of the Pareto distribution based on Type II Censored Data. By weighting LINEX loss function to produce a modified loss function called weighted linear exponential (WLINEXLF) loss function. We then use WLINEXLF to derive the shape parameter, reliability, and hazard rate functions of the Pareto distribution. Furthermore, to examine the performance of the proposed method WLINEXLF we conduct a Monte Carlo simulation. The comparison is between the proposed method and other methods including maximum likelihood estimation (MLE) and Bayesian estimation under the squared error loss function. The results of the simulation show that the proposed method WLINEXLF in this article has the best performance in estimating shape parameter, reliability, and hazard rate functions, according to the smallest values of mean squared error (MSE). This result means that the proposed method can be applied in real data in banking industrial sectors. This paper aims to use the modified loss function to estimate the shape parameter, reliability 𝑅(𝑡), and hazard rate functions h(𝑡) in Saudi banks of the Pareto distribution based on Type II Censored Data.

Digital Object Identifier (DOI)

http://dx.doi.org/10.18576/jsap/120205

Recommended Citation

Yousuf AL Tom Shihabeldeen, Hassabelrasul and S. Al-Duais, Fuad (2023) "Bayes Estimation of Pareto Distribution Based on Type II Censored Data under the Weighted LINEX Loss Function," Journal of Statistics Applications & Probability: Vol. 12: Iss. 2, Article 5.
DOI: http://dx.doi.org/10.18576/jsap/120205
Available at: https://digitalcommons.aaru.edu.jo/jsap/vol12/iss2/5