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14 May 2020  (606 Views) 
Out of the box

Use policy decisions based on risk evaluation
My friend sent me this link to an article about covid-19. I read it. It described the harm that the virus can do to the body.

I replied to my friend that I do not pay attention to scare stories. Even though the stories may be true, it applies to a small number of people. I will wait for more cases to be confirmed before I worry about this outcome. Meanwhile, I will treat it like an accident. 

He replied - spoken like a true statistician.

I like to draw the following observations:

a) It is important to look at the actual data and to assess the cost of risk - i.e. the severity (amount of loss) and the frequency (or likelihood). If the cost is high, we should pay attention.

b) We should not worry about "what could happen". There are too many things that could happen. The sky could fall down, right?

c) Policy decisions should be made by proper risk evaluation, i.e. the cost of risk. It should not be made by "what could happen".

Tan Kin Lian

Vote - do you agree with the approach of "cost of risk"?


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