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Parameter estimation techniques have been successfully and extensively applied to deterministic models but are in early development for stochastic models. In this paper, we introduce a new method, the minimum cost realization method or MCR method, for approximating parameters for a continuous-time Markov chain (CTMC) model. This method is an adaption of well-established techniques used in parameter estimation for deterministic systems to account for the variability inherent in stochastic systems. Comparing this method to an established method, the MCR method provides significantly better estimates for parameter values on the two example models considered. AMS Subject Classification: 60H35, 60J22, 60J27, 65C20, 45Q05, 49N45

DEVELOPMENT OF THE MCR METHOD FOR ESTIMATION OF PARAMETERS IN CONTINUOUS TIME MARKOV CHAIN MODELS