What is the difference between qualitative and quantitative risk assessment?

Qualitative and quantitative risk assessments serve distinct purposes in understanding risks associated with certain activities or decisions. The correct answer highlights that qualitative assessments utilize numerical data and statistical analysis to evaluate risks, while quantitative assessments rely on subjective judgment to analyze risks.

In qualitative risk assessment, risks are often categorized and prioritized based on descriptions rather than numerical values. This method typically involves expert opinions, experiences, and scenarios to provide a broad understanding of potential risks without diving deep into specific metrics. It helps organizations identify and evaluate risks in a more narrative format.

Conversely, quantitative risk assessment focuses on measurable data and typically involves numerical evaluations and statistical methods. This approach seeks to provide a clear, numeric representation of risk levels, allowing for more precise comparisons and decisions based on the calculated likelihood and impact of various risks.

Understanding this distinction is crucial for risk assessors, as it helps them select the appropriate method based on the specific context and available data, ensuring that risk evaluations are both relevant and actionable.