Difference Between Risk and Uncertainty
Uncertainty and Risk are two terms that speak of the expectations in the future. Risk is an inherent part of life and if there is no risk then there is no gain and this is a concept which is even taught in B-schools, but what is the difference between risk and uncertainty? It is a question that is quite confusing and this article aims at clarifying the misconceptions regarding these two words by emphasizing the meaning and usage of these words.
Risk
Life begins with the risk and probably there is no human effort that does not involve risk. All activities involve some risk, but some are naturally more risky than others. For example, trying to climb Mount Everest is obviously a risky venture, but even you go to drive your car around the city, there is little risk of accident. There are many definitions of risk and although everyone talks about different things, they all agree on one point and it is future problems or accidents can be avoided or reduced by undertaking an activity.
Uncertainty
To a lot of people, uncertainty and risk seem to mean almost the same. It is a word which implies action or events which are beyond one’s control and can occur in the future. Uncertainty involves an X factor whenever it is used in the sense that it can never be measured or quantified. When you do not know the result of any activity you are unsure of it. For example, if something happens for the first time, you are not aware of what the consequences may be.
The difference between risk and uncertainty
Risk and uncertainty both are related to loss or a danger that can be in future, while the risk can be quantified and measured, there is no known way to check the uncertainty. The risk is closer to the chances that you know what the chances of a result are. In the gambling example, if you take a risk on a particular number in a roulette game, you know that the chances of that number are finally appearing 1 / 29 or the number being present in the game, while the uncertainty is reflected when you are not sure of the result as in the case of putting money on a horse in a horse race.
Risk and uncertainty are concepts that speak of the expectations in the future, but then you can minimize the risk by taking health policies to cope with an uncertain future; you cannot remove the uncertainty of the life entirely.
When airplanes were introduced, many people were afraid to fly, saying it was very risky and actually they were right. But with technological advances, the risk factor was significantly minimized, although there is always the uncertainty that is beyond human control.
When you are unsure, you are not sure what will happen next. When you take precautions against a disease, you reduce the risk of contracting it. Thus it becomes clear that the risk lies in the fact when you know that danger is present, but with very low possibility of its occurrence, but the uncertainty is when you know nothing of the result.