ABSTRACT
This chapter aims to introduce some of the basic tools needed for the type of risk assessment problems. To appreciate why causal modelling is such an effective method for risk assessment and decision analysis reader first need to understand something about the traditional statistics and data analysis methods. For all nice properties the Normal distribution is often a very poor model to use for most types of risk assessment. The Normal distribution has some very nice mathematical properties, which makes it very easy for statisticians to draw inferences about the population that it is supposed to be modelling. Correlations and significance values are the standard techniques that statisticians use to determine whether there are genuine relationships between different variables. The correlation coefficient is a number between –1 and 1 that determines whether two paired sets of data, such as those for height and intelligence of a group of people are related.
