Module Tutor: tbc (Please contact Dr Katerina Stavrianaki firstname.lastname@example.org for inquiries )
Module: 15 credits
Department: Statistics and IRDR
This course aims to give an introduction to the statistical treatment of risk, the calculation of losses, and the theory of how to make optimal decisions based on such considerations. We begin with a review of statistical methods for estimating parameters of physical processes, and then show how these can be used to find the expected loss associated with different decisions, allowing choices to be made. Much of this course focuses on how to estimate the probability of extreme events occurring, for example high magnitude earthquakes, or large terrorist attacks. Additionally, we cover methods for detecting whether something important about a physical process has changed, so that risk computations can be updated in the light of new information.
On successful completion of this course, a student should be able to understand measures of risk, find appropriate probability models for risky events, and check the validity of the underlying assumptions, understand Bayesian risk together with its theoretical assumptions, understand basic extreme value statistics, and understand basic time series modelling with structural change detection.