On the Application of Generalized Beta-G Family of Distributions to Prices of Cereals

Abstract

Generalized Beta-G family of distributions proposed has alternative distributions to unbounded distributions for modeling price returns. In contrast to Gaussian and other unbounded distributions that take values from , Generalized Beta-G family of distributions takes values from so as to properly contain only positive valued observations like that of price returns. In line with this, Nine (9) befitting candidates of the Generalized Beta-G family of distributions were proposed and subjected to monthly prices of cereals. Chen distributional random noise outstripped other candidates of the Generalized Beta-G family of distributions to produce minimum monthly standard deviations of 0.2686 (26.86%), 0.2572 (25.72%), 0.2404 (24.40%), 0.2267 (22.67%), 0.2257 (22.57%), 0.2544 (25.44%), 0.2343 (23.43%), 0.2391 (23.91%), 0.2273 (22.73%) and 0.2465 (24.65%) for prices of Rice, Maize, Sorghum, Millet, G-corn, Cowpea, Groundnut, Beans, Wheat and Cassava respectively. Chen and Loglogistic distributional random noises are the leading candidates among the Generalized Beta-G family of distributions in modelling price returns of the cereals, followed by Fréchet, Weibull and Birnbaum-Saunders random noises in order of significant. Lomax and Linear Failure Rate (LFR) are the ineffective random noises in modeling the price returns.