ABSTRACT
Man's ability to develop conceptual models of reality has proved of immense value in establishing his mastery over the environment. The advantage of introducing mathematics into a conceptual model is that the relations between analytic components of the model are defined far more precisely. This chapter discusses that a model is simply a functional construct, which enables one to make accurate predictions. Perhaps the best way to illustrate this is to discuss in some detail examples of simulation, deterministic, probabilistic, and statistical models. Mathematical models can be represented most conveniently by a set of deterministic equations. In such equations every relevant mathematical condition or constraint has a precise effect not subject to chance variation. In statistical models one is usually concerned with whether certain empirical data fall under one of two categories for which alternative probabilistic frameworks have been constructed. The chapter describes the way in which statistical models are developed to test hypotheses based on empirical data.
