Decision analysis of a gamma hydrologic variate

Hydrologists have studied the statistical nature of summer-type storms and the decision problems associated with containing their runoff. In this tradition, winter storms are examined here. In contrast to summer storms the gamma family rather than the exponential fits the Tucson rainfall record. Use of the gamma law entails greatly increased computational complexity, and a major effort is made to achieve efficiency of calculation. This study begins by reporting statistical tests indicating that the gamma family describes the precipitation process. A natural conjugate family for the gamma law is derived and discussed. Numerical methods for Bayesian analysis of the (somewhat recalcitrant) gamma variate are explained and tested on simulated data. The concluding sections give examples (return time and levee height) of decision making when the gamma family is the underlying law. The method of decision analysis is applicable to other hydrologic problems in which the gamma distribution (also called the Pearson type 3) is a plausible model. Moreover, it is believed that the bulk of the numerical methods derived herein will prove useful in significantly many other Bayesian decision theory contexts.