Preparing Students for the Future: Extreme Events and Power Tails

Abstract

We provide tools for identification and exploration of data with very large variability having power law tails. Such data describe extreme features of processes such as fire losses, flood, drought, financial gain/loss, hurricanes, population of cities, among others. Prediction and quantification of extreme events are at the forefront of the current research needs, as these events have the strongest impact on our lives, safety, economics, and the environment. We concentrate on the intuitive, rather than rigorous mathematical treatment of models with heavy tails. Our goal is to introduce instructors to these important models and provide some tools for their identification and exploration. The methods we provide may be incorporated into courses such as probability, mathematical statistics, statistical modeling or regression methods. Our examples come from ecology and census fields. Supplementary materials for this article are available online.