Bayes' Theorem and Quantitative Risk Assessment

by Stan Kaplan, PLG, Inc, Newport Beach, United States,

Abstract: This paper argues that for a quantitative risk analysis (QRA) to be useful for public and private decisionmaking, and for rallying the support necessary to implement those decisions, it is necessary that the QRA results be `trustable'. Trustable means that the results are based solidly and logically on all the relevant evidence available. This, in turn, means that the quantitative results must be derived from the evidence using Bayes' theorem. Thus, it argues that we should strive to make our QRAs more clearly and explicitly Bayesian, and in this way make them more `evidence dependent' than `personality dependent.'

Subject Headings: Risk management | Quantitative analysis | Public health and safety | Public private partnership | Private sector | Decision making | Bayesian analysis | Probability

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