Editing Daniel Bernoulli (section)

==Economics and statistics==
In his 1738 book ''Specimen theoriae novae de mensura sortis (Exposition of a New Theory on the Measurement of Risk)'',<ref>English translation in {{cite journal|journal=Econometrica|volume=22|title=Exposition of a New Theory on the Measurement of Risk|year=1954|pages=23–36|url=http://www.econ.ucsb.edu/~tedb/Courses/GraduateTheoryUCSB/Bernoulli.pdf |archive-url=https://web.archive.org/web/20080513060618/http://www.econ.ucsb.edu/~tedb/Courses/GraduateTheoryUCSB/Bernoulli.pdf |archive-date=13 May 2008 |url-status=live|jstor=1909829|doi=10.2307/1909829|last1=Bernoulli|first1=D.|issue=1 |s2cid=9165746 }}</ref> Bernoulli offered a solution to the [[St. Petersburg paradox]] as the basis of the economic theory of [[risk aversion]], [[risk premium]], and [[utility]].<ref>[[Stanford Encyclopedia of Philosophy]]: "[http://plato.stanford.edu/entries/paradox-stpetersburg/ The St. Petersburg Paradox] by R. M. Martin</ref> Bernoulli often noticed that when making decisions that involved some uncertainty, people did not always try to maximize their possible monetary gain, but rather tried to maximize "[[utility]]", an economic term encompassing their personal satisfaction and benefit. Bernoulli realized that for humans, there is a direct relationship between money gained and utility, but that it diminishes as the money gained increases. For example, to a person whose income is $10,000 per year, an additional $100 in income will provide more utility than it would to a person whose income is $50,000 per year.{{sfnp|Cooter|Ulen|2016|pp=44–45}}

One of the earliest attempts to analyze a statistical problem involving [[censoring (statistics)|censored data]] was Bernoulli's 1766 analysis of [[smallpox]] [[morbidity]] and [[Mortality rate|mortality]] data to demonstrate the efficacy of [[inoculation]].<ref>reprinted in {{cite journal|year=2004|pmid=15334536|url=http://www.semel.ucla.edu/biomedicalmodeling/pdf/Bernoulli&Blower.pdf|title=An attempt at a new analysis of the mortality caused by smallpox and of the advantages of inoculation to prevent it|last1=Blower|first1=S|last2=Bernoulli|first2=D|volume=14|issue=5|pages=275–88|doi=10.1002/rmv.443|journal=Reviews in Medical Virology|s2cid=8169180|url-status=dead|archive-url=https://web.archive.org/web/20070927032605/http://www.semel.ucla.edu/biomedicalmodeling/pdf/Bernoulli%26Blower.pdf|archive-date=27 September 2007}}</ref>