Karen

May 18th 2005, 04:37 PM

Hi,

My book presents two versions of the Pareto density function with parameters a and m (I am sorry that I can't use greek letters):

f(x)=(am^a)/(x^(a+1))

and

f(y)=(am^a)/(y+m)^(a+1) where Y=X-m

If you are given the values of a and m and the question asks for the expectation, which one would you use? (the first one is my guess)

When asked any question, how do you know which one is appropriate?

Thanks,

Karen

My book presents two versions of the Pareto density function with parameters a and m (I am sorry that I can't use greek letters):

f(x)=(am^a)/(x^(a+1))

and

f(y)=(am^a)/(y+m)^(a+1) where Y=X-m

If you are given the values of a and m and the question asks for the expectation, which one would you use? (the first one is my guess)

When asked any question, how do you know which one is appropriate?

Thanks,

Karen