The rare disease assumption is a useful mathematical assumption in epidemiologic case control studies where the hypothesis tests the association between an exposure and a disease. It is assumed that, if the prevalence of the disease is low, then the odds ratio approaches the relative risk.
Case control studies are relatively inexpensive and less time consuming than cohort studies. Since case control studies don't track patients over time, they can't establish relative risk. The case control study can, however, calculate the exposure-odds ratio, which, mathematically, approaches the relative risk as prevalence falls.