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Probability
Proportion sample
Probability population
Example
Workforce distribution in the United States. Industry Probability Agriculture 0.130 Construction 0.147 Finance, Insurance, Real Estate 0.059 Manufacturing 0.042 Mining 0.002 Services 0.419 Trade 0.159 Transportation, Public Utilities 0.042
Sample Space
Simple Events
Event
Exercise
A bowl contains three red and two yellow balls. Two balls are randomly selected and their colors recorded. Use a tree diagram to list the 20 simple events in the experiment, keeping in mind the order in which the balls are drawn.
Classical Approach: Assuming all outcomes to be equally likely, the probability of an event is the number of favourable outcomes divided by the total number of outcomes. Ex. Rolling a dice
Example
Workforce distribution in the United States. Industry Probability Agriculture 0.130 Construction 0.147 Finance, Insurance, Real Estate 0.059 Manufacturing 0.042 Mining 0.002 Services 0.419 Trade 0.159 Transportation, Public Utilities 0.042
Probability
P(Agriculture)
Probability
Probability
P(Agriculture) = 0.13 P(Either Agriculture or Construction or both) P(Agriculture Construction) = 0.13+0.147=0.277. P(Agriculture and Construction) P(Agriculture Construction)
Probability
P(Agriculture) = 0.13 P(Either Agriculture or Construction or both) P(Agriculture Construction) = 0.13+0.147=0.277. P(Agriculture and Construction) P(Agriculture Construction) =0. P(Not in Agriculture) P(Agriculturec )
Probability
P(Agriculture) = 0.13 P(Either Agriculture or Construction or both) P(Agriculture Construction) = 0.13+0.147=0.277. P(Agriculture and Construction) P(Agriculture Construction) =0. P(Not in Agriculture) P(Agriculturec ) = 1-0.13=0.87.
Compound Events
If A and B are two events then
Union event is A B
Intersection event is A B
Complement event is Ac
S A B A
S B
S A A B C
AUB
S B D
Probability Rules
1 2
Mutually Exclusive
Def: Two events are mutually exclusive if they do not have any common outcome.
Mutually Exclusive
This implies that for mutually exclusive events A and B, P(A B) = P(A)+P(B).
P(Tomato only)
P(Mushroom-Tomato)
P(Mushroom-Fish)
Union Rule
What is the probability that your slice will have tomato or mushroom?
Union Rule
What is the probability that your slice will have tomato or mushroom?
Ans. 6/8=3/4
Intersection Rule
What is the probability that your slice will have tomato and mushroom?
Intersection Rule
What is the probability that your slice will have tomato and mushroom?
Ans. 3/8
Complement Rule
What is the probability that your slice will not have tomato?
Complement Rule
What is the probability that your slice will not have tomato?
Ans. 3/8
Conditional Probability
You have pulled out a slice of pizza that has tomato on it. What is the probability that your slice will have mushrooms?
Ans. 3/5.
Conditional Probability
Notation: A|B
Multiplication rule
Statistical Independence
Two events are said to be independent if occurrence of one has no eect on the chances for the occurrence of the other.
Statistical Independence
Using the Statistically Independent Pizza, are events mushroom and tomato independent?
Statistical Independence
Independence
Exercise 1
Is Gender related to whether someone voted in the last mayoral election? Answer the question using the joint probabilities given in the table below.
Table: Is gender related to whether someone voted in the last mayoral election
Statistical Independence
Given a set of events S1 , S2 , . . . , Sk that are mutually exclusive and exhaustive, and an event A, the probability of the event A can be expressed as P (A) = P (S1 ).P (A|S1 ) + P (S2 ).P (A|S2 ) +P (S3 ).P (A|S3 ) + . . . + P (Sk ).P (A|Sk )
Exercise 2
A business group own three ve-star hotels (say, A, B, and C) in India. By studying the past behavior of the revenue obtained from the three hotels month by month, it has been observed that the probability of increase in revenue of either B or C or both of them is 0.5. If As revenue increases in a given month, the probability of increase in Bs revenue is 0.7, the probability of increase in Cs revenue is 0.6, and the probability of increase in both B and Cs revenue is 0.5. However if As revenue does not increase in a given month, the probability of increase in Bs revenue is 0.2, the probability of increase in Cs revenue is 0.3, and the probability of increase in both B and Cs revenue is 0.1. What is the probability that the revenue of all the three hotels, A, B, and C increases in a given month?
Exercise 3
You are a physician. You think it is quite likely that one of your patients has strep throat, but you are not sure. You take some swabs from the throat and send them to a lab for testing. The test is (like nearly all lab tests) not perfect. If the patient has strep throat, then 70% of the time the lab says YES but 30% of the time it says NO. If the patient does not have strep throat, then 90% of the time the lab says NO but 10% of the time it says YES. You send ve succesive swabs to the lab, from the same patient. You get back these results, in order; YNYNY. What do you conclude? These results are worthless. It is likely that the patient does not have the strep throat. It is slightly more likely than not, that patient does have the strep throat. It is very much more likely than not, that patient does have the strep throat.
Bayes Rule
Let S1 , S2 , . . . , Sk represents k mutually exclusive and exhaustive sub-populations with prior probabilities P (S1 ), P (S2 ), . . . , P (S2 ). If an event A occurs, the posterior probability of Si given A is the conditional probability P (Si |A) = P (Si ).P (A|Si )
k j =1
Exercise
Bibliography
An Introduction to Probability and Inductive Logic, by Ian Hacking Introduction to Probability and Statistics, by William Mendenhall, Robert J. Beaver, and Barbara M. Beaver Practice of Business Statistics, by David S. Moore, George P. McCabe, William M. Duckworth, and Stanley L. Sclove Bradley A. Warner, David Pendergrift, and Timothy Webb,That was Venn, This is now, Journal of Statistical Education, Volume 6, Number 1, 1998