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The relative risk (RR) or risk ratio is the ratio of the probability of an outcome in an exposed group to the probability of an outcome in an unexposed group. Together with risk difference and odds ratio , relative risk measures the association between the exposure and the outcome.
In one model in monetary economics, an increase in relative risk aversion increases the impact of households' money holdings on the overall economy. In other words, the more the relative risk aversion increases, the more money demand shocks will impact the economy. [13]
In epidemiology, the relative risk reduction (RRR) or efficacy is the relative decrease in the risk of an adverse event in the exposed group compared to an unexposed group. It is computed as ( I u − I e ) / I u {\displaystyle (I_{u}-I_{e})/I_{u}} , where I e {\displaystyle I_{e}} is the incidence in the exposed group, and I u {\displaystyle I ...
Logistic regression as described above works satisfactorily when the number of strata is small relative to the amount of data. If we hold the number of strata fixed and increase the amount of data, estimates of the model parameters ( α i {\displaystyle \alpha _{i}} for each stratum and the vector β {\displaystyle {\boldsymbol {\beta ...
The isoelastic utility function is a special case of hyperbolic absolute risk aversion and at the same time is the only class of utility functions with constant relative risk aversion, which is why it is also called the CRRA utility function. In statistics, the same function is called the Box-Cox transformation. It is
The relative risk reduction is 0.5 (50%), while the absolute risk reduction is 0.0001 (0.01%). The absolute risk reduction reflects the low probability of getting colon cancer in the first place, while reporting only relative risk reduction, would run into risk of readers exaggerating the effectiveness of the drug. [5]
Frequently used measures of risk and benefit identified by Jerkel, Katz and Elmore, [4] describe measures of risk difference (attributable risk), rate difference (often expressed as the odds ratio or relative risk), population attributable risk (PAR), and the relative risk reduction, which can be recalculated into a measure of absolute benefit ...
where r is the risk-free rate, (μ, σ) are the expected return and volatility of the stock market and dB t is the increment of the Wiener process, i.e. the stochastic term of the SDE. The utility function is of the constant relative risk aversion (CRRA) form: