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Bootstrap And Second Order Tests Of Risk Difference, Chris Lloyd

Chris J. Lloyd

Standard approximate tests of the difference of two probabilities have type 1 error that can differ significantly from nominal, even for quite large sample sizes. There are two modern methods of reducing type 1 error. One is to use so-called higher order asymptotics (Reid, 2003) to provide an explicit adjustment to the likelihood ratio statistic. The second is to replace the nuisance parameter in an exact calculation with a null estimate (Young and Lee, 2005), which is a kind of bootstrap. The purpose of this paper is to explain and evaluate these two methods, for testing whether a difference in …