What is Triple Power Law? What does it mean to parameterize the distribution?
In the context of the RPX methodology, parameterization is the process of fitting a theoretical distribution to empirical data. For the RPX, we refer to this theoretical distribution as “Triple Power Law.™” The goal is to incorporate as much information as is available about the universe of data in order to help control for the idiosyncrasies of a particular sample. In essence, we do not calculate the daily price based solely on the raw data in a short period of time (a day, a week, or a month). We use an understanding of the dynamics derived from looking at the data over a longer period of time to give us a truer interpretation of the data in the shorter time period than simple statistics (e.g., average or median) allow. This enables us to combine the timeliness of using data from the recent past with the robustness of using a longer time window. For example, if you are trying to find the median or average height of male New Yorkers, you might stand on Seventh Avenue measuring the fir
