Expected Utility as a Policy Making Tool: An Environmental Health Example

Lara J. Wolfson, Joseph B. Kadane and Mitchell J. Small


Statistical decision theory can be a valuable tool when considering the results of a statistical analysis for health policy decisions. In this paper, we review briefly the history of decision theory in statistics, and introduce methods for eliciting loss functions to be used when two parties with possibly conflicting interests need to reach a decision. We illustrate the methods with examples concerning public exposure to potential health risks from environmental contamination.

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