5.1 ADVANTAGES AND DISADVANTAGES OF THE EXTREME VALUE THEORY
The extreme value theory has a number of advantages that has popularized its utility in the field of science, hydrology, finance, insurance, structural engineering, finance, earth sciences, traffic prediction, and geological engineering, etc. They provide a robust means of modeling the extreme events without there being a need of making strong assumptions about the process that is generating the data. Also, their use is justified by a rigorous body of mathematical theory. Such processes reflect many of the uncertainties that are involved in the modeling of rare events. They provide a straightforward application to the data relative to many other statistical methods. However, there
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This creates serious implications that the extreme value theory will be appropriate only if the dataset is reasonably large. They have been used in disciplines where large amounts of data are routinely collected such as finance and oceanography and rarely used in fields like ecology and medicine where the data is expensive to be collected and also difficult to be achieved. Also, in models where there is a very strong reason to believe that the distribution to be used for modeling is say, normal distribution then the results obtained from that will be better than the use of the extreme value methods. In many applications, however, the user may have a large dataset and no strong reason to believe a priori that these data should follow any particular distribution. In these circumstances, extreme value methods provide a powerful and robust approach for assessing the probabilities associated with very rare events. Extreme value methods do depend upon certain assumptions, however, and it is always important to check that these assumptions are likely to be reasonable for the dataset at hand. Therefore, the extreme value methods are designed to answer intrinsically difficult questions because they can relate to the …show more content…
Weather and seasonal predictions: The extreme value theory is used to find the probabilistic estimates of the extreme maximum rainfall or temperature for a location. The theory fits the model and tries to capture the uncertainty of data and fits the Generalized Pareto distribution or the Generalized Extreme Value distribution to the underlying data. A major threat to the components of ecosystems is manifested locally via the changes in the regional extreme weather and climate events due to high temperature or flood due to extreme rainfall. The extreme value theory deals with the stochastic behavior of the extreme values in a process where the behavior of the maxima can be described. An accurate estimate of the frequency and the distribution of these events can significantly provide an aid in policy planning and observation system
In Figs. (\ref{fig:NC3Mont.eps}-\ref{fig:NC6Mont.eps}), the results of the Monte Carlo analysis is presented along with the result obtained for the central values of the parameter. It is observed that for the form factors $C_3^{N \Delta}(Q^2)$, $C_4^{N \Delta}(Q^2)$ and $C_6^{N \Delta}(Q^2)$, Monte Carlo analysis and the prediction for the central values agree at large values of $Q^2$, but deviate from each other for small values of
What is meant by ‘statistical infrequency’ as a definition of abnormality? [2 marks] Gavin describes his daily life. ‘I sometimes get gripped with the thought that my family is in danger. In particular, I worry about them being trapped in a house fire. I now find that I can only calm myself if I check that every plug socket is switched off so an electrical fire couldn’t start.
The normal probability curve is a bell-shaped curve which peaks
The Stark law is a federal law, which was named after Pete Stark, a former congressman that created the law to prohibit physicians or doctors from referring patients to institutions where the doctors have a financial gain or relationship. The patients, however, must be Medicare patients. The relationship addressed, in this case, implies any financial relationship as a consequence of ownership or whether the doctor acquires financial compensation from referring the patient to the institution. The same law can also be examined under the physician referral law, which is stipulated in the Social Security Act, section 1877. Management Responsibility and Violation Consequences
In the experiment that tested whether leaf litter played a role in poison frog decline, there was ten plots that had no change in leaf litter. The data was fairly consistent until plot number seven appeared to have sixteen frogs in it. This was more than twice of the amount of frogs than any of the other plots with no change in leaf litter. Clearly, this is an outlier in the data and could have thrown off the average amount of strawberry poison dart frogs in leaf litters. If 1,000 frogs had been tested, this outlier would not have made such an impact on the mean.
Evidence based practice (EBP) is a process of integrating high quality evidence into practice or care provided by health professionals and decision makers in health care. This discussion will explore the meaning of the term Evidence Based Practice further and discuss its origins. EBP requires finding the best available evidence to inform practice, its greatest benefit being the best possible care for a client. Other benefits and limitations will be further discussed below. EBP demands the client be seen as an individual and their unique circumstances be considered in the application of evidence
View value and Risk Driver, describe what these objective covers. The value and risk driver provide an informative basis for the achievement of control objectives and therefore for the realization and support of the risk management. Value drives can be interpreted as examples for upcoming business benefits through an adequate control coverage, where as the risk driver can be seen as examples for avoiding or handling risks.
4. Calculate the difference amidst theoretical, simulated and practical values. 5. Consult Hishan to probe in details about problematic components. 6.
The examples given are all types of solutions that are practical, effective, and aligned with the goal. The resources needed, the risks involved, and the possible advantages were all evaluated. They prioritize the options with the highest
Framing Truths How do we know what is true? How do we know if a man sentenced to death was truly a murderer? A question echoed by thousands of people revolting against the death penalty as the story of Todd Willingham made it to the headlines. In The New Yorker, under the title of Trial by Fire, came the terrifying enigma: “Did Texas execute an innocent man?” followed by a thorough listing of the evidence that was used to convict Willingham of setting his house on fire and resulting in the death of his three children, and how they were later disproved. There is a great misconception about the source of controversy in issues like these.
Summary Of Argument, Methods: In 1968, stop and frisk was based on strict guidelines that explained how far an officer can frisk someone according to the Fourth and Fourteenth Amendments. Behind the police officers’ stop and frisks, the strategies of broken windows policing and the zero-tolerance policy were introduced. Broken windows theory began in New York during the year of 1982, and former Mayor Giuliani of New York created zero-tolerance policy in 1997. Broken windows was a known policing strategy throughout all departments in the nation.
Given the risk considerations provided in the RCD tool and the Portfolio Theory, the next step should be understanding the available risk/return metrics and determining an optimal mix of assets. Risk Metrics and Advantage/Disadvantages There are two risk metrics used in the model, Conditional Tail Expectation (CTE) and Value at Risk (VaR). These two metrics both look at the tail of the distribution. VaR is a measure of particularly poor outcomes in a stochastic projection. Its major shortcoming is its lack of statistical coherency.
To understand the full theory and its impact, the main ideas, the importance, the research done with it, and its strengths and weaknesses must be
If I say that we all are irrational, some of you might defend me say that not all are irrational. But I can prove that all of us have unintentionally been an part of irrational decision making, like not wearing vehicle seat belt because you thought it might spoil your amazing outfit, smoking and drinking alcohol, poor financial decision (buying unnecessary items), not attending a lecture or class, and many more. In a survey conducted in Manhattan 50% of the people had purchased an umbrella for a very high price on rainy day from street vendor. Moreover, 77% of the people said they would purchase an umbrella for a high price on a rainy day if it were necessary. However, 90% of the people will not buy the same umbrella for even half the price if it was a sunny day (Summer, 2012).
Insurance is the equitable transfer of risk of a loss, from one entity in exchange of money. In today’s world, it is difficult to find a person who is not fully insured. Thus, insurance is a means to manage possible risks, as no one wants to face any type of a loss. It is evident that the insurance companies are now profiting to a greater extent since everyone wants to be on a safer side and avoid risks. This has in turn helped in the economy’s development and growth.