On additive and multiplicative damage models and the characterizations of linear and logarithmic exponential families

Abstract

AbstractRao (1963) has formulated a damage model which we call an additive damage model. A suitable damage model, which we call a multiplicative damage model, has been considered by Krishnaji (1970) for income‐related problems. In these models, an original observation is subjected to damage, e.g., death or under‐reporting, according to a specified probability law. Within the framework of an additive damage model, with a special form of damage, characterizations of the linear and logarithmic exponential families are formulated using regression properties of the damaged part on the undamaged part. The characterizations of the gamma and Pareto distributions that have been found of some use in the theory of income distributions, are obtained as special cases. Similar results are investigated within the framework of the multiplicative damage model.