A Decision of Uncertainty

A Decision of Uncertainty Paper

There are decisions that people make where the outcome is presumably known and, there are the decisions that people make where the results are unknown. The latter part of the aforementioned statement is also known as decisions of uncertainty. To make these choices with more confidence, we will explore concepts that will formulate these judgments. We also have to include appropriate probability concepts that will help limit uncertainty in certain decisions. This paper will disclose the decision to reside in the tri-state area with the probability of destructive hurricanes occurring. Next this paper will reveal concepts and the outcome from the statistical analysis that was used to determine the final decision and, the tradeoffs between accuracy and precision required by various probability concepts. As a final point, this paper will demonstrate the effects the decision had on the data provided and the decision that was ultimately made.
Probability Concepts and Application Hurricane Sandy hit Atlantic City, New Jersey on October 29, 2012. A 900-mile wide storm, Sandy affected the entire northeastern United States with devastating winds, rain and floods. New Jersey and New York suffered the worst from the super storm leaving thousands of people without power for days. People living in this area were not prepared or expected the storm to devastate the area as it did leaving homes and personal belongings destroyed. So, what is the probability of New Jersey and New York becoming destroyed again by treacherous hurricanes such as Sandy? First we need to look at how often hurricanes of this nature occur in the tri-state area and the variables that contribute to them. According to "Think Progress" (2012), “A strong ridge of high pressure parked itself over Greenland beginning on October 20, creating a “blocking ridge” that prevented the normal west-to-east flow of winds over Eastern North America. The strength of the blocking ridge, as measured by the strength of the North Atlantic Oscillation (NAO), was quite high–about two standard deviations from average, something that occurs approximately 5% of the time. When the NAO is in a strong negative phase, we tend to have blocking ridges over Greenland. Blocking ridges occur naturally, but are uncommon over Greenland this time of year. According to NOAA’s Climate Prediction Center, blocking near the longitude of Greenland (50°W) only occurs about 2% of the time in the fall. These odds rise to about 6% in winter and spring”. (Did Climate Change Have A Role in Hurricane Sandy’s Unusual Track Into New Jersey?). The dependent variable is the Hurricane and the independent variables are the Arctic sea ice loss that results into blocking ridges. The probability concept that will be utilized to answer the profound question is conditional probability. According to "Stat Trek" (2012), “The probability that Event A occurs, given that Event B has occurred, is called a conditional probability. The conditional probability of Event A, given Event B, is denoted by the symbol P (A|B).” (Rules of Probability).
Outcome from Statistical Analysis In my decision of uncertainty, the event of another hurricane like Sandy is A, occurring again given event B the 2012 Arctic sea ice melt forming blocking ridges can be answered by solving the below probability. If it is known that a hurricane like Sandy has 5% likelihood to return in subsequent years as long as the strength of the blocking ridge is two standard deviations from the average, we need to solve the equation by using the below conditional equation. In addition, another reputable source indicates there is an 80% chance that in subsequent years another hurricane will occur with similar capabilities but there is a 20% chance it will not.

[pic]

.
|Event |Prior Probability |Conditional |Joint Probability |Posterior Probability |
| |P(Ci) |Probability |P(Ai and B) |P(Ai|B) |
| | |P(B|Ci) | | |
|Hurricane will not occur |0.95 |0.20 |0.19 |0.19/0.23=0.83 |
|Hurricane will occur |0.05 |0.80 |0.04 |0.04/0.23=0.17 |
| | | |P(B) = .23 |= 1.00 |

According to the calculations above there is a .83 probability that a hurricane will occur and a 0.17 probability that a hurricane of such magnitude will not occur again.
Tradeoffs between Accuracy and Precision “Accuracy refers to the ability of the instrument to identify correctly the nature and

amounts of a product’s components. Precision refers to the consistency with which the

instrument will identify the components of the same material.” (Cooper & Schindler, 2011, p.

415) In this example the tradeoff would be the accuracy of the statistical analysis of a hurricane

that has similar capabilities, such as Sandy happening again. The precision would be the

consistency of which the hurricane will happen again. The balance between the two will be to

come to middle point where the hurricane occurring again is true.

Final Decision The final decision to reside in the tri-state area with the probability of a hurricane such as Sandy occurring again is 83%. The results of the probability are alarming and therefore people who live in the aforementioned areas who do not want to encounter the loss of their homes and personal belongings becoming destroyed again may want to consider relocation. One way to minimize or mitigate the risk however is to consider relocating to areas that are less prone to flooding.

References
Think Progress. (2012). Retrieved from http://thinkprogress.org/climate/2012/11/03/1125981/jeff-masters-why-did-hurricane-sandy-take-such-an-unusual-track-into-new-jersey/?mobile=nc

Stat Trek. (2012). Retrieved from http://stattrek.com/probability/probability-rules.aspx
Cooper, D.R., & Schindler, P.S. (2011). Business Research Methods (11th ed.). Retrieved from The University of Phoenix eBook Collection database.