Sensitivity analysis
Sensitivity Analysis
Sensitivity Analysis (pronunciation: sen-si-tiv-i-ty a-na-ly-sis) is a statistical technique used in quantitative research and risk management. It is used to determine how different values of an independent variable impact a particular dependent variable under a given set of assumptions. This technique is used within specific boundaries that depend on one or more input variables, such as the effect that changes in interest rates have on bond prices.
Etymology
The term "Sensitivity Analysis" is derived from the concept of determining the "sensitivity" of the outcome of a mathematical model or system to changes in its parameters. It was first used in this context in the field of systems analysis during the 1970s.
Related Terms
- Variable: A symbol representing a quantity that may change.
- Dependent and Independent Variables: Variables in mathematical modeling, statistical modeling and experimental sciences.
- Quantitative Research: The systematic empirical investigation of observable phenomena via statistical, mathematical, or computational techniques.
- Risk Management: The identification, evaluation, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability or impact of unfortunate events.
- Systems Analysis: The process of observing systems for troubleshooting or development purposes.
See Also
External links
- Medical encyclopedia article on Sensitivity analysis
- Wikipedia's article - Sensitivity analysis
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