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Q55Section B (Part B)55 of 120

UMP test for the Pareto shape parameter

Let X1,X2,…,XnX_1,X_2,\dots,X_n be a random sample from a continuous distribution with the common probability density function

f(x∣θ)={2θθxθ+1,x>2,0,otherwise,f(x\mid\theta)=\begin{cases}\dfrac{2^\theta\theta}{x^{\theta+1}},&x>2,\\0,&\text{otherwise,}\end{cases}

where θ(>0)\theta(>0) is an unknown parameter. Suppose P(Y>χm,β2)=βP(Y>\chi^2_{m,\beta})=\beta, where Y∼χm2Y\sim\chi^2_m. For testing H0:θ=1H_0:\theta=1 against H1:θ>1H_1:\theta>1, a uniformly most powerful test of size α\alpha, 0<α<10<\alpha<1, will reject H0H_0 if

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