Properties of balanced permutations.

This paper takes a close look at balanced permutations, a recently developed sample reuse method with applications in bioinformatics. It turns out that balanced permutation reference distributions do not have the correct null behavior, which can be traced to their lack of a group structure. We find that they can give p-values that are too permissive to varying degrees. In particular the observed test statistic can be larger than that of all B balanced permutations of a data set with a probability much higher than 1/(B + 1), even under the null hypothesis.