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Column: Technical Aids: The Usefulness of Monte Carlo Tests

Summary: Monte Carlo, Monaco has given its name to a class of procedures that uses random numbers to solve problems that are analytically intractable. Here we will be concerned with problems of testing hypotheses. When the statistic for a problem is known and critical values are tabulated, there is in principle no problem in carrying out the test. But what about a problem for which the distribution of the desired statistic is not available? Perhaps the derivation of this distribution is so difficult that it has not yet been worked out.Here we illustrate the problem with two examples. The first example is simplistic and has only teaching merit. It is designed to make the procedure clear and to allow us to move confidently into the solution of the second problem. It also makes the point that the Monte Carlo procedure works just as well whether or not the required distribution is known.

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  • Topics:
  • Keywords: Cluster analysis,Monte Carlo methods,Hypothesis testing,Computer models
  • Author: Nelson, Lloyd S.
  • Journal: Journal of Quality Technology