DEMYSTIFYING MODELLING: QUANTITATIVE MODEL'S One of the many impacts of the COVID-19 crisis has been to highlight the role of quantitative models in our lives. Ideas associated with modelling, such as flattening the curve of disease transmission, are now regularly discussed in the media and among families and friends. Across the globe, we are trying to understand the numbers and what they mean for us. Forward-looking models aren't new. They have long played an important but unseen role in day-to-day lifefor instance, in pricing homeowners' insurance, anticipating the weather, and deciding how many iPhones to manufacture. However, in the COVID-19 pandemic, the scale of impact and the level of uncertainty have introduced new challengesand notorietyfor modelers. Used properly, models provide information that can present a framework for understanding a situation. But they aren't crystal balls that state with certainty what will happen, and they don't in themselves answer the difficult question of what to do. The eminent British statistician George Box summarized the point with his famous aphorism: "All models are wrong, but some are useful." And he refined it by saying, "Since all models are wrong, the scientist must be alert to what is importantly wrong. It is inappropriate to be concerned about mice when there are tigers abroad." Making decisions in the face of uncertainty is challenging, particularly during a pandemic. Quantitative models can help us understand systems and behaviors in several useful ways that help navigate this ambiguous environment. Models structure data in support of reasoned decision making by restricting variables to those that matter for a particular question. For example, when developing a demographic model to help civic leaders plan future community needs, key drivers could be birth rates, death rates, and new-job creation. Models can help users understand what is known about each element and identify the areas of continuing uncertainty. Models are well suited to exposing sensitivities: they show how even small changes in key assumptions can produce large variations in outcomes, helping decision makers establish priorities. An obvious case in point related to the COVID-19 pandemic is the massive impact of even small adjustments in the transmission rate of infection. By establishing sensitivities, models pinpoint areas for investment of effort or money to reduce uncertainty. Models expose how different assumptions lead to different outcomes. Through discussion of modelling results, decision makers can form a collective judgement on scenarios to plan for, based on the multiple variables considered, and thus reach practical decisions. For example, models were used to enable policy makers to weigh the benefits of requiring seatbelts against the moral hazard of encouraging people to drive faster. Not only do models trigger discussion, but they may force a more nuanced and evidence-based approach to decision making. In many cases, that is more important than the specific output itself. A model is simply a tool, and, as with any tool, its value highly correlates with the way it is used. Models can be broken down into three main components: raw data, assumptions that define what the model does with the data, and final output. The relative importance of assumptions and data varies by model. Google Search's autofill, for example, is mostly data driven, while the adage about waiting an hour before swimming is driven by assumptions. Each part must be viewed with a critical lens failure to do so can lead to poorly informed decisions. A model is only as good as its underlying data, and data in a time of extreme uncertainty, such as a global pandemic, present a serious challenge. Just as rotten ingredients won't produce a tasty dish no matter how good the recipe is, poor data lead to poor output from a model. Data can be wanting for various reasons: too few data points, inconsistency, inaccuracy, or incorrectly generalizing from a particular data set. Modelling anything related to a novel virus entails the risk of using bad data. Virtually all the data series being collected about the COVID-19 crisis are incomplete or subject to caveats. For example, using data on the impacts of the COVID-19 pandemic in one geography to model potential impacts in another community can be problematic. Data might not be generalizable if the populations differ in important dimensions, such as age. Ultimately, when using models to make decisions or when interpreting their outputs, there are several key questions to ask: How has this model simplified the world? What inputs does the model require, and how knowable, certain, and stable are those inputs? What are the outputs telling us, and what is the level of uncertainty? And lastly, how have users engaged with this model in the process of making decisions? Satisfactory answers to these questions will foster a better understanding of potential future scenarios and better decisions in an evolving and uncertain situation.1.1

As highlighted in the case study, making decisions in the face of uncertainty is challenging, particularly during a pandemic. Examine how quantitative risk models can be of significance to planners. Make use of relevant examples. (20 marks) 1.2 In light of the case study provided, demonstrate the primary reasons why the use of modelling techniques should be utilised in managing the COVID19 crisis and other related risk occurrences.