โ† Decision Making and Prediction

Risk probabilities

Risk can be expressed as the probability that a biologically important event occurs within a specified time or under specified conditions.

If \(Y\) is an outcome and \(C\) a critical level, a useful quantity is

\[P(Y>C).\]

Examples include the probability of an epidemic exceeding a given size, a population falling below a viability threshold or hospital demand exceeding capacity.

Estimating risk

For stochastic simulation, if \(m\) of \(M\) independent simulations exceed the threshold,

\[\hat p=\frac{m}{M}\]

estimates the exceedance probability.

Key idea. Risk probabilities convert a distribution of possible outcomes into the probability of a decision-relevant event.