On classes of consistent tests for the Type I Pareto distributionbased on a characterization involving order statistics

Abstract

We propose new classes of goodness-of-fit tests for the Pareto TypeI distribution. These tests are based on a characterization of thePareto distribution involving order statistics. We derive the limitingnull distribution of the tests and also show that the tests are con-sistent against fixed alternatives. The finite-sample performance ofthe newly proposed tests are evaluated and compared to some ofthe existing tests, where it is found that the new tests are compet-itive in terms of powers. The paper concludes with an applicationto a real world data set, namely the earnings of the 22 highest paidparticipants in the inaugural season of LIV golf