ASSESSING THE LOSSES CAUSED BY AN INDUSTRIAL INTERVENTION - A HIERARCHICAL BAYESIAN-APPROACH

A nonparametric multiplicative hazard model is proposed, and applied t o the estimation of losses caused by a strike at a Quebec aluminium sm elter in 1967. The Bayesian approach is adopted, and Gibbs sampling fo r the numerical computations. We obtain a posterior distribution of th e hazard rate and the corresponding predictive distribution of the pro jected losses. The main merit of the approach proposed is that the unc ertainties concerning the actual losses, both in terms of the total nu mber of operating days lost and the excess number of damaged aluminium reduction cells, can be quantified with probabilities. The compensati on of the losses is discussed, and the results are compared with some point estimates from earlier analyses of the same data.