Hazard Rate

What is a Hazard Rate?

Hazard rate refers to the death rate of an item at a particular age. This rate is applied to things that can’t be repaired. It is also called a failure rate. This is applicable to the design of safer systems in the application and relies on commerce, engineering, insurance, finance and others.

Hazard failure is part of a system that checks the likelihood of a commodity that is prone to survive up to a certain point based on the rate of survival earlier. Basically, it is a rate that measures whether a commodity will Fail or die depending on the age it has reached. This is a part of the branch of statistics which is known as ‘survival analysis’. The concept of hazard rate is also applicable under different names like reliability analysis, duration analysis and event analysis.

Formula for Hazard Rate

Hazard rate can be determined with the following formula:

h(t)=f(t)/R(t)

Note:

F(t)- the probability that the failure or death will fall in a specified time period

R(t)- Survival function or the probability of surviving past a certain time

(t)- time

Hazard Rate Example

Regarding failure or death, there is a certain certainty that the event is likely to occur at a particular period in time.

For instance, Tommy is a 1-month-old puppy and is small in size. The owner is deciding to adopt between Tommy and another dog aged 5 years. The owner is now calculating the life expectancy of the dog. Small-sized dogs usually live for around 12 years-17 years. The other dog, a little bigger in size, has a life expectancy of 17 years as well. This way this puppy has a chance of surviving for another 17 years while the other dog may live for another 5-10 years.

Since the owner is looking to adopt a dog with high-life expectancy, he will go for Tommy over the other dog.