The theme of the VESTING Conference 2017 is welfare and wellbeing: applications of econometrics. Optimization is a concept that can be applied to everything around us. For example: every month we pay for our health insurance, but why we pay this exact amount which is optimised, is generally unknown. Insured healthcare, as we know it, exists because of actuarial science. Actuaries calculate your monthly contribution which corresponds with what we want to have insured. Controlling the costs of healthcare and managing them into an affordable insurance for us is one of the greatest problems our society currently has, which will be solved by actuaries.
The theme ‘Welfare and Wellbeing’ is applicable to all three fields of the program ‘Econometrics, Operations Research and Actuarial Studies’.
Firstly, Econometrics plays an important role in welfare and wellbeing. Optimizing the welfare is something we see a lot in macro- and microeconomics. A challenge within the optimisation of someone’s wellbeing is the fact that it is hard to express in a number, which makes it hard to optimise. Econometricians try to reach a higher level of accuracy by using more advanced and complicated models and techniques, which is an ongoing process.
Also Operations Research (OR) is used often to optimise all kind of daily processes. In this way it can heighten our level of welfare and wellbeing. For example, comprehensive models founded by OR studies find their application in the field of transportation and infrastructure. The application of OR is also used for the assignment of people or machines. For example, the number of cashiers needed at your supermarket in a specific time slot or the number of buses deployed at a certain bus line. The optimal solution for these problems can both be estimated with the help of OR.
Finally, we can see how vital Actuarial Studies are, if we, for instance look at insurances. They are very important to sustain our level of welfare and wellbeing. For example, if you are not insured, some accident can gravely affect your financial and personal situation in a negative way. A few sectors in which this concept plays an important role are healthcare, pensions and the properties.