Bayes factors for peri-null hypotheses

Abstract

A perennial objection against Bayes factor point-null hypothesis tests is that the point-null hypothesis is known to be false from the outset. We examine the consequences of approximating the sharp point-null hypothesis by a hazy ‘peri-null’ hypothesis instantiated as a narrow prior distribution centered on the point of interest. The peri-null Bayes factor then equals the point-null Bayes factor multiplied by a correction term which is itself a Bayes factor. For moderate sample sizes, the correction term is relatively inconsequential; however, for large sample sizes, the correction term becomes influential and causes the peri-null Bayes factor to be inconsistent and approach a limit that depends on the ratio of prior ordinates evaluated at the maximum likelihood estimate. We characterize the asymptotic behavior of the peri-null Bayes factor and briefly discuss suggestions on how to construct peri-null Bayes factor hypothesis tests that are also consistent.