Abstract
We propose new classes of goodness-of-fit tests for the Pareto Type I distribution. These tests are based on a characterization of the Pareto distribution involving order statistics. We derive the limiting null distribution of the tests and also show that the tests are consistent against fixed alternatives. The finite-sample performance of the newly proposed tests are evaluated and compared to some of the existing tests, where it is found that the new tests are competitive in terms of powers. The paper concludes with an application to a real world data set, namely the earnings of the 22 highest paid participants in the inaugural season of LIV golf.
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