Probability Distribution

What Is a Probability Distribution?

A probability distribution is a statistical function that describes all the possible
values and likelihoods that a random variable can take within a given range. This
range will be bounded between the minimum and maximum possible values, but
precisely where the possible value is likely to be plotted on the probability
distribution depends on a number of factors. These factors include the
distribution's mean (average), standard deviation, skewness, and kurtosis.

A probability distribution is a table or an equation that links each outcome

of a statistical experiment with its probability of occurrence.

Probability Distribution Prerequisites

To understand probability distributions, it is important to understand

variables. random variables, and some notation.

 A variable is a symbol (A, B, x, y, etc.) that can take on any of a

specified set of values.

 When the value of a variable is the outcome of a statistical

experiment, that variable is a random variable.

Generally, statisticians use a capital letter to represent a random variable

and a lower-case letter, to represent one of its values. For example,

 X represents the random variable X.

 P(X) represents the probability of X.

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  P(X = x) refers to the probability that the random variable X is equal

to a particular value, denoted by x. As an example, P(X = 1) refers to

the probability that the random variable X is equal to 1.

Probability Distributions

An example will make clear the relationship between random variables and

probability distributions. Suppose you flip a coin two times. This simple
statistical experiment can have four possible outcomes: HH, HT, TH, and TT.

Now, let the variable X represent the number of Heads that result from this
experiment. The variable X can take on the values 0, 1, or 2. In this example,

X is a random variable; because its value is determined by the outcome of a

statistical experiment.

A probability distribution is a table or an equation that links each

outcome of a statistical experiment with its probability of occurrence.

Consider the coin flip experiment described above. The table below, which
associates each outcome with its probability, is an example of a probability

distribution.

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 Number of heads Probability

0 0.25

1 0.50

2 0.25

The above table represents the probability distribution of the random

variable X.

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Random Variable Definition

What Is a Random Variable?

A random variable is a variable whose value is unknown
or a function that assigns values to each of an
experiment's outcomes. Random variables are often
designated by letters and can be classified as discrete,
which are variables that have specific values, or
continuous, which are variables that can have any values
within a continuous range.

Random variables are often used in econometric or

regression analysis to determine statistical relationships
among one another.

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Expectation and Variance
The expected value (or mean) of X, where X is a discrete random variable, is a
weighted average of the possible values that X can take, each value being
weighted according to the probability of that event occurring. The expected value
of X is usually written as E(X) or m.
 E(X) = S x P(X = x)
So the expected value is the sum of: [(each of the possible outcomes) × (the
probability of the outcome occurring)].
In more concrete terms, the expectation is what you would expect the outcome of
an experiment to be on average.
Example
What is the expected value when we roll a fair die?
There are six possible outcomes: 1, 2, 3, 4, 5, 6. Each of these has a probability
of 1/6 of occurring. Let X represent the outcome of the experiment.
Therefore P(X = 1) = 1/6 (this means that the probability that the outcome of the
experiment is 1 is 1/6)
P(X = 2) = 1/6 (the probability that you throw a 2 is 1/6)
P(X = 3) = 1/6 (the probability that you throw a 3 is 1/6)
P(X = 4) = 1/6 (the probability that you throw a 4 is 1/6)
P(X = 5) = 1/6 (the probability that you throw a 5 is 1/6)
P(X = 6) = 1/6 (the probability that you throw a 6 is 1/6)
E(X) = 1×P(X = 1) + 2×P(X = 2) + 3×P(X = 3) + 4×P(X=4) + 5×P(X=5) +
6×P(X=6)
Therefore E(X) = 1/6 + 2/6 + 3/6 + 4/6 + 5/6 + 6/6 = 7/2
So the expectation is 3.5 . If you think about it, 3.5 is halfway between the
possible values the die can take and so this is what you should have expected.
Expected Value of a Function of X
To find E[ f(X) ], where f(X) is a function of X, use the following formula:
 E[ f(X) ] = S f(x)P(X = x)

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Example
For the above experiment (with the die), calculate E(X2)
Using our notation above, f(x) = x2
f(1) = 1, f(2) = 4, f(3) = 9, f(4) = 16, f(5) = 25, f(6) = 36
P(X = 1) = 1/6, P(X = 2) = 1/6, etc
So E(X2) = 1/6 + 4/6 + 9/6 + 16/6 + 25/6 + 36/6 = 91/6 = 15.167
The expected value of a constant is just the constant, so for example E(1) = 1.
Multiplying a random variable by a constant multiplies the expected value by that
constant, so E[2X] = 2E[X].
A useful formula, where a and b are constants, is:
 E[aX + b] = aE[X] + b
[This says that expectation is a linear operator].
Variance
The variance of a random variable tells us something about the spread of the
possible values of the variable. For a discrete random variable X, the variance of
X is written as Var(X).
 Var(X) = E[ (X – m)2 ]            where m is the expected value E(X)
This can also be written as:
 Var(X) = E(X2) – m2
The standard deviation of X is the square root of Var(X). 
Note that the variance does not behave in the same way as expectation when we
multiply and add constants to random variables. In fact:
 Var[aX + b] = a2Var(X)
You is because: Var[aX + b] = E[ (aX + b)2 ] - (E [aX + b])2 .
= E[ a2X2 + 2abX + b2] - (aE(X) + b)2
= a2E(X2) + 2abE(X) + b2 - a2E2(X) - 2abE(X) - b2
= a2E(X2) - a2E2(X) = a2Var(X)

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What is a Probability Distribution?
A probability distribution is a table or an equation that links each
possible value that a random variable can assume with its probability of
occurrence.

Discrete Probability Distributions

What is a discrete distribution?

A discrete distribution describes the probability of occurrence of

each value of a discrete random variable. A discrete random
variable is a random variable that has countable values, such as
a list of non-negative integers.

With a discrete probability distribution, each possible value of

the discrete random variable can be associated with a non-zero
probability. Thus, a discrete probability distribution is often
presented in tabular form.

The probability distribution of a discrete random variable can always be

represented by a table. For example, suppose you flip a coin two
times. This simple exercise can have four possible outcomes: HH, HT,
TH, and TT. Now, let the variable X represent the number of heads that
result from the coin flips. The variable X can take on the values 0, 1, or
2; and X is a discrete random variable.

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The table below shows the probabilities associated with each possible
value of X. The probability of getting 0 heads is 0.25; 1 head, 0.50; and
2 heads, 0.25. Thus, the table is an example of a probability
distribution for a discrete random variable.

Number of heads, x Probability, P(x)

0 0.25

1 0.50

2 0.25

Note: Given a probability distribution, you can find cumulative probabilities.

For example, the probability of getting 1 or fewer heads [ P(X < 1) ] is
P(X = 0) + P(X = 1), which is equal to 0.25 + 0.50 or 0.75.

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Continuous Probability
Distributions

Continuous probability
distribution: A probability distribution in which the
random variable X can take on any value (is continuous).
Because there are infinite values that X could assume, the
probability of X taking on any one specific value is zero. Therefore
we often speak in ranges of values (p(X>0) = .50). The normal
distribution is one example of a continuous distribution. The
probability that X falls between two values (a and b) equals the
integral (area under the curve) from a to b:

The probability distribution of a continuous random variable is

represented by an equation, called the probability density
function (pdf). All probability density functions satisfy the following
conditions:

 The random variable Y is a function of X; that is, y = f(x).

 The value of y is greater than or equal to zero for all values of x.
 The total area under the curve of the function is equal to one.

The charts below show two continuous probability distributions. The

first chart shows a probability density function described by the
equation y = 1 over the range of 0 to 1 and y = 0 elsewhere. The
second chart shows a probability density function described by the
equation y = 1 - 0.5x over the range of 0 to 2 and y = 0 elsewhere. The
area under the curve is equal to 1 for both charts.

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 y=1

y = 1 - 0.5x

The probability that a continuous random variable falls in the interval

between a and b is equal to the area under the pdf curve
between a and b. For example, in the first chart above, the shaded area
shows the probability that the random variable X will fall between 0.6
and 1.0. That probability is 0.40. And in the second chart, the shaded
area shows the probability of falling between 1.0 and 2.0. That
probability is 0.25.

Note: With a continuous distribution, there are an infinite number of

values between any two data points. As a result, the probability that a
continuous random variable will assume a particular value is always
zero. For example, in both of the above charts, the probability that
variable X will equal exactly 0.4 is zero.

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Binomial Distribution
 

What Is Binomial Distribution?

Binomial distribution is a probability distribution that

summarizes the likelihood that a value will take one of
two independent values under a given set of
parameters or assumptions. The underlying
assumptions of the binomial distribution are that there
is only one outcome for each trial, that each trial has
the same probability of success, and that each trial
is mutually exclusive, or independent of each other.
Binomial distribution is a common discrete distribution
used in statistics, as opposed to a continuous
distribution, such as the normal distribution. This is
because the binomial distribution only counts two
states, typically represented as 1 (for a success) or 0
(for a failure) given a number of trials in the data. The
binomial distribution, therefore, represents the
probability for x successes in n trials, given a success
probability p for each trial.

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Criteria of Binomial Distribution
Binomial distribution models the probability of occurrence of an event
when the specific criteria are met. Binomial distribution involves the
following rules that must be present in the process in order to use the
binomial probability formula:

1. Fixed trials
The process under investigation must have a fixed number of trials that
cannot be altered in the course of the analysis. During the analysis, each
trial must be performed in a uniform manner, although each trial may yield
a different outcome.

In the binomial probability formula, the number of trials is represented by

the letter “n.” An example of a fixed trial may be coin flips, free throws,
wheel spins, etc. The number of times that each trial is conducted is known
from the start. If a coin is flipped 10 times, each flip of the coin is a trial.

2. Independent trials
The other condition of a binomial probability is that the trials are
independent of each other. In simple terms, the outcome of one trial
should not affect the outcome of the subsequent trials.

When using certain sampling methods, there is a possibility of having trials

that are not completely independent of each other, and binomial
distribution may only be used when the size of the population is large vis-
a-vis the sample size.

An example of independent trials may be tossing a coin or rolling a dice.

When tossing a coin, the first event is independent of the subsequent
events.

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3. Fixed probability of success

In a binomial distribution, the probability of getting a success must remain
the same for the trials we are investigating. For example, when tossing a
coin, the probability of flipping a coin is ½ or 0.5 for every trial we conduct,
since there are only two possible outcomes.

In some sampling techniques like sampling without replacement, the

probability of success from each trial may vary from one trial to the other.
For example, assume that there are 50 boys in a population of 1,000
students. The probability of picking a boy from that population is 0.05.

In the next trial, there will be 49 boys out of 999 students. The probability
of picking a boy in the next trial is 0.049. It shows that in subsequent trials,
the probability from one trial to the next will vary slightly from the prior
trial.

4. Two mutually exclusive outcomes

In binomial probability, there are only two mutually exclusive outcomes, i.e.,
success or failure. While success is generally a positive term, it can be used
to mean that the outcome of the trial agrees with what you have defined as
a success, whether it is a positive or negative outcome.

For example, when a business receives a consignment of lamps with a lot of

breakages, the business can define success for the trial to be every lamp
that has broken glass. A failure can be defined as when the lamps have zero
broken glasses.

In our example, the instances of broken lamps may be used to denote

success as a way of showing that a high proposition of the lamps in the
consignment is broken. and that there is a low probability of getting a lamp
with zero breakages.

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Example of Binomial Distribution
Suppose, according to the latest police reports, 80% of all petty crimes are
unresolved, and in your town, at least three of such petty crimes are
committed. The three crimes are all independent of each other. From the
given data, what is the probability that one of the three crimes will be
resolved?

Solution
The first step in finding the binomial probability is to verify that the situation
satisfies the four rules of binomial distribution:

 Number of fixed trials (n): 3 (Number of petty crimes)

 Number of mutually exclusive outcomes: 2 (solved and unsolved)
 The probability of success (p): 0.2 (20% of cases are solved)
 Independent trials: Yes

Next:

We find the probability that one of the crimes will be solved in the three
independent trials. It is shown as follows:

Trial 1 = Solved 1st, unsolved 2nd, and unsolved 3rd

= 0.2 x 0. 8 x 0.8

= 0.128

Trial 2 = Unsolved 1st, solved 2nd, and unsolved 3rd

= 0.8 x 0.2 x 0.8

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= 0.128

Trial 3 = Unsolved 1st, unsolved 2nd, and solved 3rd

= 0.8 x 0.8 x 0.2

= 0.128

Total (for the three trials):

= 0.128 + 0.128 + 0.128

= 0.384

Alternatively, we can apply the information in the binomial probability

formula, as follows:

Where:

In the equation, x = 1 and n = 3. The equation gives a probability of 0.384.

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Properties of binomial distribution
1.  Binomial distribution is applicable when the trials are independent and
each trial has just two outcomes success and failure.

It is applied in coin tossing experiments, sampling inspection plan, genetic

experiments and so on.

2. Binomial distribution is known as bi-parametric distribution as it is

characterized by two parameters n and p.

This means that if the values of n and p are known, then the distribution is
known completely.

3.  The mean of the binomial distribution is given by 

μ  =  np

4. Depending on the values of the two parameters, binomial distribution may

be uni-modal or bi-modal.

To know the mode of binomial distribution, first we have to find the value of
(n+1)p. 

(n+1)p is a non integer --------> Uni-modal

Here, the mode  =  the largest integer contained in  (n+1)p

(n+1)p is a integer --------> Bi-modal 

Here, the mode  =  (n+1|)p, (n+1)p - 1

5.  The variance of the binomial distribution is given by

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 σ²  =  npq

6.  Since p and q are numerically less than or equal to 1,

npq < np

That is, variance of a binomial variable is always less than its mean.

7.  Variance of binomial variable X attains its maximum value at p = q = 0.5

and this maximum value is n/4.

8. Additive property of binomial distribution.

Let X and Y be the two independent binomial variables. 

X is having the parameters n₁ and p 

and 

Y is having the parameters n₂ and p. 

Then (X+Y) will also be a binomial variable with the parameters (n₁ + n₂) and p

The binomial distribution describes the behavior of a count variable X if the

following conditions apply:

1: The number of observations n is fixed.

2: Each observation is independent.
3: Each observation represents one of two outcomes ("success" or "failure").
4: The probability of "success" p is the same for each outcome.

If these conditions are met, then X has a binomial distribution with

parameters n and p, abbreviated B(n,p).

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Poisson Distribution
What Is a Poisson Distribution
In statistics, a Poisson distribution is a statistical distribution that shows how many
times an event is likely to occur within a specified period of time. It is used for
independent events which occur at a constant rate within a given interval of time.

The Poisson distribution is a discrete function, meaning that the event can only be
measured as occurring or not as occurring, meaning the variable can only be
measured in whole numbers. Fractional occurrences of the event are not a part
of the model. it was named after French mathematician Siméon Denis Poisson.

DEFINITION

normal distribution

A normal distribution is an arrangement of a data set in which most values

cluster in the middle of the range and the rest taper off symmetrically toward
either extreme.

Height is one simple example of something that follows a normal distribution

pattern: Most people are of average height, the numbers of people that are
taller and shorter than average are fairly equal and a very small (and still
roughly equivalent) number of people are either extremely tall or extremely
short.

Here’s an example of a normal distribution curve:

A graphical representation of a normal distribution is sometimes called a bell

curve because of its flared shape. The precise shape can vary according to
the distribution of the population but the peak is always in the middle and the
curve is always symmetrical. In a normal distribution, the mean, mode and
median are all the same.
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Normal distribution curves are sometimes designed with a histogram inside
the curve. The graphs are commonly used in mathematics, statistics and
corporate data analytics.

Standard Normal Distribution

The standard normal distribution is a special case of the normal distribution . It is the distribution that
occurs when a normal random variable has a mean of zero and a standard deviation of one.

The normal random variable of a standard normal distribution is called a standard score or a z score. Every
normal random variable X can be transformed into a z score via the following equation:

z = (X - μ) / σ

where X is a normal random variable, μ is the mean, and σ is the standard deviation.

Properties of normal distribution

1)      The normal curve is bell shaped in appearance.

2)      There is one maximum point of normal curve which occur at

mean.

3)      As it has only one maximum curve so it is unimodal.

4)      In binomial and possion distribution the variable is discrete

while in this it is continuous.

5)      Here mean= median =mode.

6)      The total area of normal curve is 1. The area to the left and
the area to the right of the curve is 0.5.

7)      No portion of curve lies below x-axis so probability can never

be negative.

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8)      The curve becomes parallel to x-axis which is supposed to
meet it at infinity.

9)      Here mean deviation = 4/5 standard deviation.

10)  Quartile deviation = 5/6 mean deviation

11)   Quartile deviation : mean deviation : standard deviation

           10                :          12            

:        15

12)   4 standard deviation = 5 mean deviation = 6 quartile deviation

 These are the properties of normal distribution.

Importance of normal distribution

1)      It has one of the important properties called central theorem.

Central theorem means relationship between shape of population
distribution and shape of sampling distribution of mean. This means
that sampling distribution of mean approaches normal as sample size
increase.

2)      In case the sample size is large the normal distribution serves
as good approximation.

3)      Due to its mathematical properties it is more popular and easy

to calculate.

4)      It is used in statistical quality control in setting up of control

limits.

5)      The whole theory of sample tests t, f and chi-square test is

based on the normal distribution.

These are the importance or uses or benefits of normal distribution.

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