New model detects outliers in data, improving accuracy and reliability.
The article introduces a new model for dealing with outliers in data that follows a specific distribution. The researchers focus on cases where data from a standard Pareto distribution is mixed with a few outliers from a Pareto distribution with a different scale. They use Bayesian analysis and the Gibbs sampler to analyze this model. The study includes examples using insurance claims data to demonstrate the model's effectiveness in practice.