A member of the Pareto family of distributions (often used in economics to model income
Chapter 6, Problem 6.18(choose chapter or problem)
A member of the Pareto family of distributions (often used in economics to model income distributions) has a distribution function given by F(y) = 0, y < , 1 y , y , where , > 0. a Find the density function. b For fixed values of and , find a transformation G(U) so that G(U) has a distribution function of F when U has a uniform distribution on the interval (0, 1). c Given that a random sample of size 5 from a uniform distribution on the interval (0, 1) yielded the values .0058, .2048, .7692, .2475 and .6078, use the transformation derived in part (b) to give values associated with a random variable with a Pareto distribution with = 2, = 3.
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