Omitting Meaningless Digits in Point Estimates: The Probability Guarantee of Leading-Digit Rules
Wheyming T. Song, Bruce W. Schmeiser
Operations Research · 2009 · Volume 57 · Issue 1
Abstract
Motivated by the question of which point-estimator digits to report in a statistical experiment, we study the probabilistic behavior of the digits as a function of the true performance measure and the point estimator's standard error. We investigate the family of Leading-Digit Rules, which guarantees that every unreported digit has correctness probability below a given threshold. Choosing the threshold to be about 0.198 yields Yoneda's rule. The easy-to-implement rule that reports the point estimate through the leading digit of the standard error has threshold (approximately) 0.117, which is not much larger than the one-in-ten probability of a uniformly distributed random digit being correct.
Keywords
statistical experiments, point estimator, standard error
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