GEV stands for Generalized Extreme Value, which is a statistical distribution used to model the extreme values of a random variable. The GEV distribution is derived from the extreme value theory and is widely applied in numerous fields such as hydrology, finance, and environmental science.
In the field of probability theory and statistics, the GEV distribution represents the limit distribution of the maximum or minimum of a large set of independent and identically distributed random variables, known as the extreme value distribution. It characterizes the probability distribution of the largest or smallest value out of a sample set.
The GEV distribution is defined by three parameters: location, scale, and shape. The location parameter determines the position of the distribution along the x-axis, the scale parameter controls the dispersion or spread, and the shape parameter influences the tail behavior of the distribution (i.e., whether it has heavy or light tails).
The GEV distribution is especially useful for modeling extreme events, such as floods or financial crashes, which are rare but have significant impacts. By fitting observed data to a GEV distribution, researchers and practitioners can estimate the probability of extreme events and assess the associated risks. This enables decision-makers to make informed choices and implement appropriate measures to mitigate potential extreme events.
