TY - JOUR
T1 - Four-decision tests for stochastic dominance, with an application to environmental psychophysics
AU - Angelov, Angel G.
AU - Ekström, Magnus
AU - Nilsson, Mats E.
AU - Kriström, Bengt
PY - 2019
Y1 - 2019
N2 - If the survival function of a random variable X lies to the right of the survival function of a random variable Y, then X is said to stochastically dominate Y. Inferring stochastic dominance is particularly complicated because comparing survival functions raises four possible hypotheses: identical survival functions, dominance of X over Y, dominance of Y over X, or crossing survival functions. In this paper, we suggest four-decision tests for stochastic dominance suitable for paired samples. The tests are permutation-based and do not rely on distributional assumptions. One-sided Cramer-von Mises and Kolmogorov-Smirnov statistics are employed but the general idea may be utilized with other test statistics. The power to detect dominance and the different types of wrong decisions are investigated in an extensive simulation study. The proposed tests are applied to data from an experiment concerning the individual's willingness to pay for a given environmental improvement. (C) 2019 Elsevier Inc. All rights reserved.
AB - If the survival function of a random variable X lies to the right of the survival function of a random variable Y, then X is said to stochastically dominate Y. Inferring stochastic dominance is particularly complicated because comparing survival functions raises four possible hypotheses: identical survival functions, dominance of X over Y, dominance of Y over X, or crossing survival functions. In this paper, we suggest four-decision tests for stochastic dominance suitable for paired samples. The tests are permutation-based and do not rely on distributional assumptions. One-sided Cramer-von Mises and Kolmogorov-Smirnov statistics are employed but the general idea may be utilized with other test statistics. The power to detect dominance and the different types of wrong decisions are investigated in an extensive simulation study. The proposed tests are applied to data from an experiment concerning the individual's willingness to pay for a given environmental improvement. (C) 2019 Elsevier Inc. All rights reserved.
KW - Stochastic dominance
KW - Stochastic ordering
KW - Four-hypothesis test
KW - Permutation test
KW - Nonparametric approach
KW - Environmental psychology
KW - Stochastic dominance
KW - Stochastic ordering
KW - Four-hypothesis test
KW - Permutation test
KW - Nonparametric approach
KW - Environmental psychology
UR - https://res.slu.se/id/publ/103250
U2 - 10.1016/j.jmp.2019.102281
DO - 10.1016/j.jmp.2019.102281
M3 - Journal article
SN - 0022-2496
VL - 93
JO - Journal of Mathematical Psychology
JF - Journal of Mathematical Psychology
M1 - 102281
ER -