On Birnbaum-Saunders Inference

The Birnbaum-Saunders distribution is frequently used in reliability studies. We obtain adjustments to the Birnbaum-Saunders profile likelihood function. The modified versions of the likelihood function were obtained for both the shape and scale parameters. Modified profile maximum likelihood estimators are obtained by maximizing the corresponding adjusted likelihood functions. We present numerical evidence on the finite sample behavior of the different estimators and associated likelihood ratio tests. The results favor the adjusted estimators and tests we propose. Two empirical applications are briefly presented.