Random and Exogenous Variation

FormulaDistribution

The netWorks application provides a general function writing capability with the FormulaDistribution selection, shown in the combo box in Figure B.1. If you select FormulaDistribution and then click the

button, a Formula Manager window (as shown in Figure B.4) is displayed.

Figure B.4: FormulaDistribution Manager and Palette

From this window, you can write a function that returns a number that is used as the sample from the FormulaDistribution. For example, suppose you wanted a mixture distribution with density function

f(x)=.5 f₁(x) + .5 f₂(x)

where f₁(x) is exponential with parameter $\lambda$ and f₂(x) is a user-defined formula. Figure B.5 shows a portion of the four windows needed to express this.

Figure B.5: An Example of a Mixture Distribution

The bottom-most window is the FormulaDistribution Formula window, and it contains the conditional element . Editing this element provides you with the capability to specify the condition .

If the condition evaluates to TRUE, it returns a value from the formula in the True Expression window , which is the appropriate exponential random variable. If it evaluates to FALSE, it returns a value from the user-defined formula in the False Expression window .

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