DISCRETE-TO-BETA: A FORTRAN IV program for converting discrete prior distributions into beta prior distributions

Abstract

The beta distribution is frequently used when one wants to make Bayesian revisions about priors, as is discussed in Till (1977). The use of continuous rather than discrete priors makes the decision framework less artificial and computationally more efficient. However, unfamiliarity with the beta distribution causes added assessment problems (Corless, 1972; Gentry, Bonczkowski, & Caldwell, in press). Consequently, training in the use of the beta distributions is needed before using the distribution in a decision-making framework. One means of obtaining the needed familiarity with the beta distribution is to provide information on corresponding discrete and beta distributions. The Program. DISCRETE-TO-BETA is a FORTRAN IV program that finds a beta distribution corresponding to the input discrete distribution through the method of moments. The two distributions are plotted so that the user can get a better idea of their correspondence. Input. The program requires the input of the discrete states of the world in decimal form (the hypothesized proportions) and the prior probability that each state is the true one. Output. The program generates the mean and variance of the discrete distribution and the values of the estimates of the beta parameters that provide the same mean and variance values for the beta distribution. The program also plots the distributions. Restriction. Program DISCRETE-TO-BETA is written in FORTRAN N, so any computer system that supports FORTRAN IV can use it. It takes 1.28 sec to run on the IBM 370-158 computer. Availability. A copy of the listing, documentation, and sample of the output can be obtained free of charge by writing to Jim Gentry, College of Business Administration, Oklahoma State University, Stillwater, Oklahoma 74074.