Abstract
The standard leading-digit rule, LDR(1) is to omit point-estimator digits to the right of the leading digit of the point-estimator's standard error. Assuming that the original point estimator is normally distributed, the authors previously showed that LDR(1) guarantees-for all means and for all standard errors-that the truncated estimator's first omitted digit is correct with probability no greater than 0.117, not much greater than the 1-in-10 chance for a random digit. We consider two variations of the previously studied LDR(1) truncated point estimator, which in the worst case has non-negligible bias. The first is the truncated estimator with an implied appended digit ¿5¿. The second is the rounded estimator, which truncates after appending the ¿5¿. Both point estimators have nearly identical statistical properties, including negligible bias. Because of the omitted digits, however, the statistical quality of the two LDR(1) point estimators cannot be better than that of the original point estimator. In terms of root mean squared error and in terms of correlation with the original estimator, we establish here that the worst-case LDR(1) degradation is about four percent.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.