We consider the problem of fitting a parametric model to time-series data
that are afflicted by correlated noise. The noise is represented by a sum of
two stationary Gaussian processes: one that is uncorrelated in time, and
another that has a power spectral density varying as 1/fγ. We present
an accurate and fast [O(N)] algorithm for parameter estimation based on
computing the likelihood in a wavelet basis. The method is illustrated and
tested using simulated time-series photometry of exoplanetary transits, with
particular attention to estimating the midtransit time. We compare our method
to two other methods that have been used in the literature, the time-averaging
method and the residual-permutation method. For noise processes that obey our
assumptions, the algorithm presented here gives more accurate results for
midtransit times and truer estimates of their uncertainties.Comment: Accepted in ApJ. Illustrative code may be found at
http://www.mit.edu/~carterja/code/ . 17 page