D0101037 Interim Opinion on Performance Incentives
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Appendix J

Log transformations

Introduction

This appendix documents staff's inquiry into the problem of applying distribution-based statistical tests to average-based performance measures. Unlike for percentage-based and rate-based measures, no distribution-free tests for average-based measures are ready to implement given the current record in this proceeding. Consequently, the only current test option is the modified t-test. Staff's primary concern is that the accuracy of normal distribution based statistical tests, such as the t-test, diminishes for smaller samples to the degree that those samples depart from normality.1 The Central Limit Theorem states that with larger samples, the sampling distribution of means is normally distributed even for non-normal raw score distributions. However, the degree of non-normality, and especially the degree of asymmetry, affects the sampling distribution, and especially affects one-tailed tests.2

Staff investigated data transformations for applying normal distribution based tests to non-normal data.3 The investigation examines: (1) several actual performance data distributions, (2) a theoretical sampling mean distribution, (3) the statistical effects of several data-normalizing transformations, and (4) the performance evaluation implications of the most statistically appropriate transformation. Conclusions regarding the best option are presented.

Method and Results

Performance result distributions

Sixteen average-based ILEC performance submeasure distributions from one performance measure were examined.4 Statistics for non-normality, skewness and kurtosis, were calculated. All but one of the distributions were positively skewed5 and all but two were leptokurtic. 6 While a normal curve has skeweness and kurtosis values of zero, the skewness of the sixteen submeasures ranged from 0.0 to 28.3, and the kurtosis ranged from -1.6 to 1746. Table 1 reports the skewness and kurtosis for the sixteen distributions. The frequency distribution graphs for these sixteen distributions are presented in Attachment 1 to this appendix.

Table 1

Submeasure

N

Mean

Median

Skewness

Kurtosis

           

Ex. 1

179254

1.18

0

21.0

1430.3

Ex. 2

23608

1.60

0

15.4

503.0

Ex. 3

19943

6.91

6

12.1

271.2

Ex. 4

17951

0.92

0

28.3

1745.7

Ex. 5

17940

2.76

2

15.6

590.3

Ex. 6

11864

1.40

0

9.1

184.6

Ex. 7

9149

1.29

0

19.7

661.2

Ex. 8

6827

2.48

1

10.3

198.6

Ex. 9

6340

3.05

1

5.3

48.2

Ex. 10

771

8.18

7

6.9

105.3

Ex. 11

538

7.89

7

1.8

8.2

Ex. 12

34

71.62

20

0.5

-1.6

Ex. 13

14

34.36

20.5

1.4

1.5

Ex. 14

9

6.00

4

1.9

4.0

Ex. 15

8

47.50

40.5

0.7

-0.1

Ex. 16

6

10.50

10.5

0.0

2.1

Academic theory indicates data from measures of time to complete a task are lognormally distributed.7 Overall, the skewness and kurtosis of these distributions were consistent with what would be expected from a lognormal distribution. Only three of the five smallest samples (n < 35) had skewness less than one (< 1). Only two of the smallest five samples had kurtosis less than one (< 1).

Theoretical sampling mean distributions

To examine the extent of the problem posed by the skewness of the data, simulated distributions were examined to investigate the sample sizes necessary to achieve normality in the sampling mean distribution. While Central Limit Theorem poses that sampling mean distributions will be normal for many large non-normal samples, it is not clear if Central Limit Theorem's general tenet applies to the data for these measures.

At staff's request, Pacific Bell's consultant, Dr. Gleason, created a MathCad© worksheet to generate multiple samples from a lognormal distribution. This worksheet is included as Attachment 2. Using this worksheet five analyses were repeated for several selected performance results. The analysis summary following the worksheet pages shows that even for samples as large as 1000, many distributions are non-normal, the degree of departure from normality can be highly variable, and the log transformation notably improves normality.

Transformation statistical effects

Since measures of time to complete a task are theoretically lognormally distributed, log transformations of the raw data were examined. However, since the data contains values of zero (0), logs cannot be taken directly from the raw data, since the log of zero (0) cannot be computed. One recommendation is to add a constant of one (1) to each score.8 However, in several cases of performance measures, the raw data is actually categorized continuous data where all orders, for example, completed in the same day as initiated were assigned a zero. In these cases there are no "true" zero values since each order takes some time to complete. The lower bound of each interval is taken as the performance result, leaving the lowest interval with a value of zero.

Suggesting that some value in the middle of the interval defined by each integer may be a more appropriate representation of the interval, staff asked Dr. Gleason to determine the optimal constant for the transformation. Dr. Gleason simulated continuous lognormal distributions which he then categorized using the performance data categories. Using a MathCad© worksheet (Attachment 3 to this appendix), Dr. Gleason then

calculated a constant that, when added to the actual categorized data, would best represent the parameters of the original continuous distribution. Staff used Dr. Gleason's worksheet to calculate the constant that would best fit actual ILEC and CLEC performance.9 The worksheet calculates that the upper limit for the optimal constant is approximately 0.5, with virtually all values between 0.3 and 0.5.10 The mean and standard deviation of the distributions affect the value of the constant, making the optimal constant slightly different for each analysis.

These results are theoretically reasonable as well. The mathematical midpoint of an interval in a skewed distribution11 is not likely to accurately represent the distribution of scores in most intervals.

The sixteen distributions were then log-transformed using three different constants: 0.3, 0.4, and 0.5. The preponderance of transformations resulted in a closer approximation to normality. The results are presented in Attachment 4. In a few of the small samples where transformations did not improve normality, the transformed results are still relatively close to normality. From these transformations it is difficult to tell which constant best and most consistently improved normality. The transformations made with the constant of 0.5 improved normality most for large means, and the transformation with the constant of 0.3 improved normality most for the samples with small means.

Since it would be impractical to calculate the optimal constant for each result, and one of the constants must be selected, staff examined the sensitivity of the modified t-test to the different transformations. Staff sought to determine which one of the constants would result in the least discrepancy compared to using an optimal constant for each result. Type I error probabilities (_) were calculated for the sixteen submeasures. Attachment 5 presents a comparison of t-test results using raw scores and different log transformations. Use of the 0.4 constant for all results appears to minimize potential discrepancies between using result-specific optimal constants versus using a single constant for all results. In other words, compared to using the 0.3 or 0.5 constants for all results, using the 0.4 constant results in an _ closer to the _ calculated by using the result-specific optimal constant.

The constant should be added wherever the average-based performance measures produce zeros by categorizing continuous data. Following this criterion, current information indicates that constants should be used with transformations for performance measures 7, 14, 21, 28, and 37, and that performance measures 1 and 44 need no constants.

The constant should be added at the level of categorization. For example, if the smallest measurement unit is one day, then a constant of 0.4 days should be added to each observation. If the smallest measurement unit is one-hundredth of an hour, such as for performance measure 21, then the constant of 0.4 of one-hundredth (4 thousandths) of an hour should be added to each observation.

Performance evaluation implications

The meaning of the impact on actual performance result decisions was also examined. (See Attachment 5.) Fourteen of the 16 industry-aggregate results had the same "pass/failure" designation for the log transformation analysis as they did for the original raw score analysis. Two results failed the log-based analysis when they originally passed the raw score analysis: submeasure examples "9" and "10." Both showed CLEC average performance worse than ILEC average performance, but the average differences were not statistically different using a raw score based test. Submeasure example "9" illustrates the nature of this failure. The original data analysis resulted in a "pass" with an alpha of 0.32, whereas the log transformed data resulted in a "failure" with an alpha of less than 0.0001. For both submeasure examples "9" and "10," compared to the means, the medians showed greater differences between ILEC and CLEC performance. In these instances, the log transformation has the effect of giving a better reflection of the difference between the two distributions

than was the case for the raw data. In the raw data analyses, extreme scores in the ILEC distribution mask the typically poorer performance for the CLEC. The transformation minimizes the effects of these extreme values.

Possibly the best illustration of the difference between the log and raw score based analyses is the results for one CLEC-specific result in submeasure example "9," where the direction of the difference between the medians was the opposite for the means. Whereas the raw score CLEC mean was 2.8 days, compared to the ILEC mean of 3.0 days, the CLEC median was 3.0 and the ILEC mean was 1.0. In other words, the average time to complete the OSS task for the CLEC was 2.8 days, which is better than the 3.0-day average for the ILEC. In contrast, the median for the ILEC performance was one day while the median for the CLEC performance was two days. In other words, the ILEC took one day or less to complete the OSS task for fifty percent of its customers, whereas the ILEC took three days or less to complete the same OSS task for fifty percent of the CLECs' customers. Similar to the submeasure "9" and "10" aggregate results, the median difference for this CLEC result was much larger than the mean difference. These results show that the distributions are markedly different. Whereas the raw score analysis did not show this result to be significant (_ = 0.86), the transformation analysis identified a significant difference (_ < 0.0001).12

In these cases, the log transformation analysis appears to track the differences in medians more closely than the means. This is consistent with academic sources that point out the value of median-based assessments when the data is skewed. For example, Hays (1997) states,

The alteration of the score for a single extreme case in a distribution may have a profound effect on the mean. It is evident that the mean follows the skewed tail in the distribution, but the median does so to a lesser extent. The occurrence of even a few very high or very low cases can seriously distort the impression of the distribution given by the mean, provided that one mistakenly interprets the mean as the typical value. If you are dealing with a nonsymmetric distribution and you want to communicate the typical value, you must report the median. (p. 181)

To assess the operational meaning of the transformation staff also examined the cumulative distribution. The cumulative percentage distribution data and graphs are included in Attachment 1 for submeasures 1 through 16, and in Attachment 7 for the CLEC-specific results described above. While a frequency distribution shows the number of "orders" completed for each time interval, a cumulative distribution shows the percentage of "orders" that were completed by a specific number of "days" or less.13 For example, the frequency distribution for submeasure "9" shows that approximately 500 of the ILEC's orders took 3 days to complete. In contrast, the cumulative distribution for submeasure "9" shows that about 80 percent of the ILEC's orders were completed in three days or less. In the cumulative distribution graphs, the higher line represents better service. For example, for submeasure "9," ILEC customers (black line) are getting better service than CLEC customers (white line) up until the point where approximately 80 percent of the orders have been completed - at a time interval of "3." Where the ILEC line is higher means that compared to CLEC customers, a greater percentage of ILEC customers are getting their orders completed within the specified time intervals. After this point, CLEC customers are getting better service as illustrated by the lines crossing. After this point the CLEC line is higher, meaning that a higher percentage of CLEC customers are getting their "orders" completed within the same time interval as ILEC customers.

The graphs in these two attachments provide a more detailed comparison of the two distributions and illustrate what the log transformation analysis detects that the raw score analysis does not. The graph shows that for submeasure example "9," for up to 80 percent of the customers, the ILEC gave better performance to its own customers. Specifically, 52 percent of ILEC customers' orders, compared to 6 percent of CLEC customers' orders, were completed within one day after the order was confirmed. Similarly, 72 percent of ILEC customers' orders, compared to 31 percent of CLEC customers' orders, were completed within two days after the order was confirmed. It is only in the final 20 percent of the distributions that CLEC customers received better performance than did the ILEC customers. For example, by the time five days passed, 88 percent of ILEC customers' orders were completed compared to 95 percent of CLEC customer's orders. These graphs depict distributions that are not "substantially equal," where CLEC customers are predominately disadvantaged even though, on the average, their completion interval is less.

Conclusions

The log transformation of time measurement raw scores that have been increased by a constant is academically supported for average-based parity measures of time to complete a task. Using a constant of 0.4 (of the smallest interval) for each transformation reasonably corrects for distribution distortions introduced by categorizing all continuous values into integers, brings the data close to being normally distributed, and results in the least variation in a Type I error probability calculation compared to using a different constant for each transformation. Additionally, sample mean distribution normality is improved not only for small to moderate samples, but also for large samples. For these reasons, this log transformation of scores with an added constant of 0.4 is the best practical option for applying the modified t-test to average-based parity measures. Additionally, the log transformation allows an appropriate statistical and practically meaningful performance assessment. Until other methods are shown to be superior and ready to implement, the Modified t-test application using log transformations is justifiable and reasonable.

References

John D. Jackson, Using permutation tests to evaluate the significance of CLEC vs. ILEC service quality differentials, Verizon CA Opening Brief, Attachment 1 at Appendix 2 (April 28, 2000).

McNemar, Q. (1962). Psychological statistics. New York: John Wiley & Sons.

Winer, B.J. (1971). Statistical principles in experimental design. New York: McGraw-Hill.

Mathcad worksheet: Investigation of the mean, standard deviation, skewness, and kurtosis of the sampling distribution of the mean before and after log transformations.

Set the parameters for the original process

Set sample sizes

Set additive constant for categorized distribution

This simulation works by generating J samples of means for which the mean, standard deviation, skewness and kurtosis are calculated. This process is repeated K times and the means of the statistics on the sampling distributions are calculated.

Set number of samples for each simulation of the sampling distribution

Set number of simulations

The following calculate the log parameters of the distribution

The following function generates a log normal distribution using logl parameters.

This function generates means for four kinds of distributions:

This function calculates statistics on each sample of sampling means and returns these statistics in a vector.

Statistics for the distribution of sample means for the untransformed (original) distribution.

Mean:

Standard Deviation:

Skewness:

Kurtosis:

Statistics for the distribution of sample means for the log transformed data.

Mean:

Standard Deviation:

Skewness:

Kurtosis:

Statistics for the distribution of sample means for the categorized data with an added constant of C.

Mean:

Standard Deviation:

Skewness:

Kurtosis:

Statistics for the distribution of sample means for the logs of the categorized data with an added constant of C.

Mean:

Standard Deviation:

Skewness:

Kurtosis:

Skewness and kurtosis variability of theoretical sampling means

 

Raw data parameters

 

Sampling mean distribution

 

 

 

 

 

Untransformed data

Transformed data

Sample size

SD

M

Cases

Constant

Skewness

Kurtosis

Skewness

Kurtosis

1000

2.6

0.5

24

0.3

1.7

7.1

0.1

0.2

 

       

1.7

6.7

0.1

0.1

 

       

1.6

5.9

0.1

-0.1

 

       

1.6

5.9

0.1

0.0

 

       

1.8

7.7

0.2

0.1

1000

2.5

0.8

129

0.4

0.9

2.2

0.1

-0.1

 

       

0.7

1.1

0.2

-0.2

 

       

0.9

1.6

0.1

0.0

 

       

0.7

1.0

0.0

-0.1

 

       

1.2

4.3

0.1

0.3

100

2.5

0.8

129

0.4

1.8

7.0

0.2

0.1

 

       

1.7

5.3

0.2

0.1

 

       

1.8

6.1

0.3

0.0

 

       

2.1

9.0

0.2

0.1

 

       

1.6

5.0

0.2

0.0

1000

6

2.9

70

0.5

0.3

0.4

-0.1

-0.2

 

       

0.5

0.8

0.0

-0.1

 

       

0.4

0.5

-0.1

0.0

 

       

0.9

3.5

0.1

-0.1

 

       

0.5

0.5

0.0

-0.1

100

6

2.9

70

0.5

1.4

4.9

0.1

0.0

 

       

0.9

1.4

0.2

-0.2

 

       

3.1

34.3

0.1

0.0

 

       

1.7

8.9

0.0

0.1

 

       

2.6

24.1

0.0

0.5

100

7

6

131

0.5

0.6

0.7

0.0

0.2

 

       

0.6

1.1

0.1

-0.1

 

       

0.4

0.3

0.0

0.1

 

       

0.3

0.0

-0.1

0.0

 

       

0.6

1.1

-0.1

0.1

30

7

6

131

0.5

1.2

3.3

0.0

0.0

 

       

0.9

1.5

0.0

-0.1

 

       

1.0

2.2

-0.1

-0.2

 

       

1.1

2.3

0.0

-0.2

 

       

0.8

1.1

-0.1

0.2

1000

16

3.1

24

0.4

1.0

1.9

0.0

-0.2

 

       

3.2

32.2

0.0

-0.1

 

       

1.5

4.3

0.1

0.4

 

       

1.3

3.0

0.0

0.0

 

       

1.6

7.1

-0.1

0.1

100

25

13

29

0.5

0.9

1.5

0.0

-0.2

 

       

2.0

11.4

0.0

0.1

 

       

0.9

1.6

0.1

0.6

 

       

1.1

2.3

0.1

0.3

 

 

 

 

 

1.1

3.0

-0.1

0.0

Mathcad worksheet: Investigation of the added constant used with the log transformation on a categorized lognormal distribution

Set the parameters for the original process

Set size of sample for investigating distribution

The following calculate the log parameters of the distribution

The following function generates a log normal distribution using log

parameters.

Theoretical mean

Emprical mean

Theoretical standard deviation

Emprical standard deviation

The following solves for a, that value which, when added to the bottom end of each interval, best recreates the emprical mean

Mean using added constant

Standard deviation using added constant

   

Skewness and kurtosis of performance result distributions

 

 

 

Raw score

Log(x+0.5)

Log(x+0.4)

Log(x+0.3)

   

Ex. 1

 

   

 

   

N

179254

179254

179254

179254

   

Mean

1.18

-0.1128

-0.2808

-0.4948

   

Median

0

-0.6931

-0.9163

-1.204

   

Skewness

21.002

1.331

1.291

1.244

   

Kurtosis

1430.297

0.28

0.126

-0.046

   

Ex. 2

 

   

 

   

N

23608

23608

23608

23608

   

Mean

1.6

0.1008

-3.81E-02

-0.2122

   

Median

0

-0.6931

-0.9163

-1.204

   

Skewness

15.411

1.053

0.942

0.817

   

Kurtosis

503.008

0.71

0.3

-0.131

   

Ex. 3

 

   

 

   

N

19943

19943

19943

19943

   

Mean

6.91

1.8604

1.8405

1.8193

   

Median

6

1.8718

1.8563

1.8405

   

Skewness

12.106

-1.27

-1.513

-1.818

   

Kurtosis

271.231

9.202

9.945

11.092

   

Ex. 4

 

   

 

   

N

17951

17951

17951

17951

   

Mean

0.9215

-0.1906

-0.3589

-0.5723

   

Median

0

-0.6931

-0.9163

-1.204

   

Skewness

28.256

1.634

1.528

1.412

   

Kurtosis

1745.695

2.331

1.773

1.188

   

Ex. 5

 

   

 

   

N

17940

17940

17940

17940

   

Mean

2.76

0.8407

0.783

0.7187

   

Median

2

0.9163

0.8755

0.8329

   

Skewness

15.569

0.666

0.499

0.278

   

Kurtosis

590.337

1.57

1.473

1.453

   

Ex. 6

 

   

 

   

N

11864

11864

11864

11864

   

Mean

1.3988

5.55E-02

-9.15E-02

-0.277

   

Median

0

-0.6931

-0.9163

-1.204

   

Skewness

9.105

0.925

0.861

0.789

   

Kurtosis

184.585

-0.336

-0.538

-0.755

   

Skewness and kurtosis of performance result distributions

   

Ex. 7

 

   

 

   

N

9149

9149

9149

9149

   

Mean

1.2922

-8.06E-02

-0.2426

-0.4484

   

Median

0

-0.6931

-0.9163

-1.204

   

Skewness

19.716

1.362

1.289

1.208

   

Kurtosis

661.21

0.903

0.585

0.246

   

Ex. 8

 

   

 

   

N

6827

6827

6827

6827

   

Mean

2.4837

0.7652

0.7077

0.6453

   

Median

1

0.4055

0.3365

0.2624

   

Skewness

10.337

1.493

1.364

1.187

   

Kurtosis

198.575

3.221

3.021

2.868

   

Ex. 9

 

   

 

   

N

6340

6340

6340

6340

   

Mean

3.05

0.8676

0.8113

0.7491

   

Median

1

0.4055

0.3365

0.2624

   

Skewness

5.295

0.993

0.855

0.668

   

Kurtosis

48.225

1.505

1.414

1.377

   

Ex. 10

 

   

 

   

N

771

771

771

771

   

Mean

8.18

1.7666

1.7302

1.6875

   

Median

7

2.0149

2.0015

1.9879

   

Skewness

6.917

-0.998

-1.094

-1.214

   

Kurtosis

105.315

0.542

0.749

1.03

   

Ex. 11

 

   

 

   

N

538

538

538

538

   

Mean

7.89

1.7286

1.6883

1.6402

   

Median

7

2.0149

2.0015

1.9879

   

Skewness

1.81

-1.096

-1.177

-1.277

   

Kurtosis

8.242

0.408

0.579

0.802

   

Ex. 12

 

   

 

   

N

34

34

34

34

   

Mean

71.6176

3.2922

3.2818

3.2712

   

Median

20

3.001

2.9959

2.9908

   

Skewness

0.525

-0.017

-0.023

-0.03

   

Kurtosis

-1.623

-1.712

-1.705

-1.698

   

Skewness and kurtosis of performance result distributions

   

Ex. 13

 

   

 

   

N

14

14

14

14

   

Mean

34.3571

2.8667

2.8315

2.7871

   

Median

20.5

3.0442

3.0395

3.0347

   

Skewness

1.389

-1.54

-1.597

-1.664

   

Kurtosis

1.484

1.906

2.033

2.184

   

Ex. 14

 

   

 

   

N

9

9

9

9

   

Mean

6

1.2422

1.1746

1.0919

   

Median

4

1.5041

1.4816

1.4586

   

Skewness

1.874

-0.407

-0.492

-0.594

   

Kurtosis

3.97

-0.763

-0.73

-0.671

   

Ex. 15

 

   

 

   

N

8

8

8

8

   

Mean

47.5

3.244

3.2322

3.2201

   

Median

40.5

3.7135

3.7111

3.7086

   

Skewness

0.732

-1.041

-1.048

-1.056

   

Kurtosis

-0.114

-0.426

-0.419

-0.412

   

Ex. 16

 

   

 

   

N

6

6

6

6

   

Mean

10.5

2.3667

2.3569

2.347

   

Median

10.5

2.3969

2.3877

2.3785

   

Skewness

0

-0.912

-0.92

-0.929

   

Kurtosis

2.086

2.601

2.611

2.62

Sensitivity analysis: Effects of transformations on alpha estimates

Ex. No.

Constant used

Ni

Mi

SDi

Nc

Mc

Z

_

Theoretical constant

1

no trnsfmn

179254

1.18

2.97

4296

0.149

-22.485

1.00

 

1

0.5

179254

-0.1128

0.9696

4296

-0.5295

-27.837

1.00

 

1

0.4

179254

-0.2808

1.0537

4296

-0.7297

-27.594

1.00

0.44

1

0.3

179254

-0.4948

1.653

4296

-0.9855

-19.228

1.00

 

 

               

 

2

no trnsfmn

23608

1.6

4.8

21

3.52

1.832

0.0335

 

2

0.5

23608

0.1008

0.9636

21

0.7646

3.155

0.0008

0.48

2

0.4

23608

-0.0381

1.0474

21

0.6724

3.107

0.0009

 

2

0.3

23608

-0.2122

1.1602

21

0.558

3.041

0.0012

 

 

               

 

4

no trnsfmn

17951

0.9215

3.4631

276

0.337

-2.783

0.997

 

4

0.5

17951

-0.1906

0.8292

276

-0.3251

-2.674

0.996

 

4

0.4

17951

-0.3589

0.907

276

-0.4968

-2.507

0.994

0.36

4

0.3

17951

-0.5723

1.012

276

-0.7131

-2.294

0.989

 

 

               

 

5

no trnsfmn

17940

2.76

4.69

302

1.755

-3.693

0.9999

 

5

0.5

17940

0.8407

0.739

302

0.6969

-3.353

0.9996

0.50

5

0.4

17940

0.783

0.7783

302

0.6348

-3.282

0.9995

 

5

0.3

17940

0.7147

0.8282

302

0.5651

-3.113

0.9991

 

 

               

 

7

no trnsfmn

9149

1.2922

4.3519

30

5.4

5.162

0.00000013

 

7

0.5

9149

-0.08056

0.9588

30

1.3947

8.414

0.00000000

0.40

7

0.4

9149

-0.2426

1.0421

30

1.3477

8.345

0.00000000

 

7

0.3

9149

-0.4484

1.1535

30

1.2916

8.249

0.00000000

 

 

               

 

9

no trnsfmn

6340

3.05

4.9

714

3.1387

0.459

0.32

 

9

0.5

6340

0.8676

0.782

714

1.1988

10.729

0.00

0.50

9

0.4

6340

0.8113

0.8171

714

1.1639

10.932

0.00

 

9

0.3

6340

0.7491

0.8608

714

1.1269

11.118

0.00

 

 

               

 

10

no trnsfmn

771

8.18

7.95

179

8.45

0.409

0.341

 

10

0.5

771

1.7666

1.0351

179

1.96

2.252

0.012

0.50

10

0.4

771

1.7302

1.0883

179

1.9397

2.320

0.010

 

10

0.3

771

1.6875

1.1571

179

1.9181

2.402

0.008

 

 

               

 

11

no trnsfmn

538

7.89

6.33

115

9.0696

1.814

0.0351

 

11

0.5

538

1.7286

1.0742

115

2.0628

3.028

0.0013

0.50

11

0.4

538

1.6883

1.1347

115

2.0468

3.075

0.0011

 

11

0.3

538

1.6402

1.2133

115

2.0303

3.130

0.0009

 

Ex. No.

Constant used

Ni

Mi

SDi

Nc

Mc

Z

_

Theoretical constant

13

no trnsfmn

14

34.3571

32.5874

30

25.03

-0.884

0.80

 

13

0.5

14

2.8667

1.6447

30

3.1086

0.454

0.33

0.50

13

0.4

14

2.8315

1.7188

30

3.1037

0.489

0.32

 

13

0.3

14

2.7871

1.8152

30

3.0987

0.530

0.30

 

 

               

 

14

no trnsfmn

9

6

7.2284

18

25.2222

6.514

0.00009

 

14

0.5

9

1.2422

1.3276

18

3.1782

3.572

0.00364

0.50

14

0.4

9

1.1746

1.4104

18

3.1736

3.472

0.00421

 

14

0.3

9

1.0919

1.5187

18

3.1689

3.350

0.00504

 

 

               

 

15

no trnsfmn

8

47.5

41.127

30

25.77

-1.328

0.887

 

15

0.5

8

3.244

1.5084

30

3.2332

-0.018

0.507

0.50

15

0.4

8

3.2322

1.5258

30

3.2291

-0.005

0.502

 

15

0.3

8

3.2201

1.5439

30

3.225

0.008

0.497

 

1 Winer (1971), p. 6. 2 Hays (1997), pp. 327-328; McNemar (1962), pp. 106-107. 3 Performance measure 34 does not measure time to complete a task and is likely normally distributed. It is excluded from this discussion and will not be subject to log transformation. See Pacific Bell Comments on the Draft Decision at 3 (December 18, 2000). 4 These distributions were provided by Pacific Bell. Staff also examined six distributions provided by Verizon and found the shape of those distributions to be similar. Those results are not reported here. 5 Positive values indicate positive skewness, that is, the observations are concentrated at the lower end of the scale and gradually trail off to fewer observations in a longer "tail" to the right, the higher part of the scale. Briefly stated, a positively skewed distribution has a longer tail for higher scores than for lower scores. Negative skewness values indicate the reverse, that is, a longer tail for the lower scores relative to the higher scores. 6 Positive values indicate leptokurtic distributions, that is, the distribution is more peaked than a normal distribution. Negative values indicate platykurtic distributions, that is, the distribution is flatter than a normal distribution. 7 Winer (1971), p. 400. 8 Id. 9 Staff used the worksheet by entering an actual posted result with a constant added to the mean. The standard deviation was entered as posted since it does not change when a constant is added to the data. If the added constant matched the calculated estimated constant (designated "_"), the calculated constant was taken to be the optimal constant. For example, for an actual posted performance result with a mean of 0.92 and a standard deviation of 3.46, a mean of 1.28 (0.92 + 0.36) was entered as the final "guess" confirming that the optimal constant would be 0.36. 10 A survey of average-based results for January through June, 2000, indicates that the theoretically most appropriate constant ranges between 0.3 and 0.5 for about 99 percent of the results (687 out of 696). For about one percent of the results (7 out of 696) a constant of between .06 and 1.2 appeared to be most appropriate. However, these seven results occurred only in March 2000 and only once for each of seven submeasures, and the constants for all other months were 0.5 for each of these submeasures. Constants for three other submeasure results were estimated to be about 0.25, but for each submeasure, the other months had estimated constants of over 0.3. No results indicate optimal constants less than 0.3 for any result since March 2000. Constants under 0.3 appear to be anomalies. 11 E.g., the interval 0.0 to 1.0 has a mathematical midpoint of 0.5. 12 A reverse of this situation is demonstrated in the BANY hypothetical data set provided in Verizon's comments in John Jackson's paper (see References). Results for the BANY data set show performance "failure" for the raw score analysis, but performance "success" for the log transformed analysis. In the BANY data set, using a 0.10 critical significance level, the difference between the ILEC and CLEC means is significant for a raw score analysis (p = 0.083), and marginally significant for a permutation analysis (p = 0.0855 to 0.1085). However, one CLEC outlier is responsible for the CLEC mean being greater than the ILEC mean. With this outlier of 53.0, the CLEC mean is 9.9 compared to the ILEC mean of 8.3. However, without the outlier, the CLEC mean is less than the ILEC mean, 5.6. The cumulative distribution for this hypothetical data is presented in Attachment 6 and illustrates that typically the CLEC received better (simulated) performance than the ILEC. In this case, the log transformation analysis reflects typical performance more than average performance in that reduces the effect of the outlier and identifies these results as a performance "success" (p = 0.97). 13 The terms "days" and "orders" are used for illustrative purposes and do not necessarily represent the actual units. Because of possible proprietary data issues the actual terms are not used.

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