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Chapt 1-Probability Part1
Chapt 1-Probability Part1
Chapt 1-Probability Part1
2 Probability
Probability is a numerical measure of the likelihood that an event will occur.
Probability is the study of chance. e.g.
What is the chance that I will pass Stats?
What is the chance that it will rain tomorrow?
What is the chance of an earthquake in LA this year?
What is the chance of getting 0 on the roulette wheel?
Terminology
Random Experiment
Outcome/Sample Point
Sample Space
All the possible outcomes of an experiment.
Event
Outcomes that are of interest for an experiment. They are a subset of the sample space. A
collection or set of one or more simple events in a sample space.
The probability of an event occurring is equal to the sum of the probabilities of the
outcomes giving rise to that event.
If we identify all the outcomes of an experiment and assign a probability to each, we can
calculate the probability for that event.
Complement of an Event
The complement of event A is defined to be the event consisting of all outcomes that are
not in A. The complement of A is denoted by , and is referred to as A prime.
Classical Probability
This occurs when we know all the possible outcomes to an experiment and the number of
outcomes for a particular event. Here the probabilities are assigned on the assumption of
equally likely outcomes.
Example
This experiment has a total of 6 outcomes. The total outcomes form the sample space.
1
P[rolling of rolling any of the possible outcomes] =
6
Example
This experiment has a total of 36 outcomes. The total outcomes form the sample space.
14
P[rolling 3,4,5 or 6 with 2 dice] = = 0.39
36
Empirical comes from the Greek word meaning “experience”. Probabilities are assigned
based on experimentation or historical data.
This method may use data built over past experience e.g. the motor claims for a particular
company. We do not totally understand the underlying process of who will crash their car
or have it stolen.
We just take the actual past data, our experience, and work out the percentage of people
that have crashed their cars or had them stolen.
To work out the empirical probability we observe the number of occurrences of an event
through an experiment and calculate the probability from a relative frequency
distribution:
Subjective Probability
Used when other two methods are not available. We base our numbers on guesstimates.
This may be based on intuition or gut feel.
E.g. a new type of insurance for domestic pets that has never been sold before. We have
no experience of past claims so we need to subjectively arrive at a premium.
Requirements/Properties of Probability
The sum of all the probabilities for the events in the sample space must equal 1 (100%).
The complement to an event A, are all events in the sample space, which do not include
event A. The complement of A is referred to as A ′ .
P[ A] + P[ A′] = 1
Example
An automatic machine fills plastic bags with a mixture of beans, broccoli and other
vegetables. Most of the bags contain the correct weight, but because of the variation in
the size of beans and other vegetables, a package may be underweight, overweight or
have the correct weight.
What is the probability of choosing a satisfactory weight bag using the complement rule?
The probability the bag is unsatisfactory equals the probability the bag is overweight or
underweight.