Probability and Statistics

Lecture # 4
Understanding Probability, its History
and Origin
 WHAT IS PROBABILITY?
 Probability denotes the possibility of the outcome of any random event. The meaning
of this term is to check the extent to which any event is likely to happen.
 Probability is the study of Chance
 Foundation of Statistical Theory and applications

DEFINITION:
“The numerical measure of the likelihood that a certain event will occur.”

EXAMPLES:
 Toss of a coin
 Draw of a playing card
 Calculating probability
 “The ratio of number of favourable cases to the number of all the cases”

No. of outcomes favorable to E

P(E) =
All possible outcomes

 Range of Probability is from ‘0’ to ‘1’

 Probability of Sure Event C is P(C) = 1
 Probability of Impossible Event M is P(M) = 0
 Probability can also be represented as a Percentage
 The sum of all probabilities σ P(Ei ) = 1
 Related terminologies
 EXPERIMENT: The process that results in one of many observations.

 OUTCOME: The observation of performed experiment.

 SAMPLE SPACE: Collection of all outcomes for an experiment.

 EVENT: Collection of one or more outcomes of an experiment.

 SAMPLE POINT: The every element of the sample space is a sample point.
 Graphical representation

VENN DIAGRAM TREE DIAGRAM

 Event

A collection of one or more of the outcomes of an experiment.

 Simple event:
Also called elementary event. includes one and only one of the (final) outcomes for an
experiment.

 Compound event:
Also called composite event. It is a collection of more than one outcome for an
experiment.
 Example
 In a group of people, some are in favour of genetic engineering and others are against it.
List all the outcomes included in each of the following events and state whether they are
simple or compound events.

(a) Both persons are in favour of genetic engineering.

(b) At most one person is against genetic engineering.
(c) Exactly one person is in favour of genetic engineering
 Example
 Two students are randomly selected from a statistics class, and it is observed whether
or not they suffer from math anxiety. How many total outcomes are possible?
List all the outcomes included in each of the following events. Indicate which are
simple and which are compound events.

a. Both students suffer from math anxiety.

b. Exactly one student suffers from math anxiety.
c. The first student does not suffer and the second suffers from math anxiety.
d. None of the students suffers from math anxiety
 Three conceptual approaches to probability

 Classical probability/ Theoretical probability

 The relative frequency concept of probability

Empirical probability/ Experimental probability

 The subjective probability concept

 Classical probability:

The classical probability rule is applied to compute the probabilities of

events for an experiment for which all outcomes are equally likely

𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑓𝑎𝑣𝑜𝑟𝑎𝑏𝑙𝑒 𝑜𝑡𝑐𝑜𝑚𝑒𝑠

P(A)=
𝑇𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑜𝑢𝑡𝑐𝑜𝑚𝑒𝑠

 Probability of obtaining a head on a coin toss

 Probability of obtaining an even number in rolling of a dice
 Relative frequency concept of probability

The relative frequency of an event is used as an approximation for the probability of that
event.
Because relative frequencies are determined by performing an experiment, the
probabilities calculated using relative frequencies may change almost each time an
experiment is repeated.

𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑡𝑖𝑚𝑒𝑠 𝑒𝑣𝑒𝑛𝑡 𝐴 𝑜𝑐𝑐𝑢𝑟𝑠

P(A)=
𝑇𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑡𝑟𝑖𝑎𝑙𝑠

Relative frequency probability is not the exact one rather it is just an approximation.
 Subjective Probability
The probability assigned to an event based on personal judgment,
experience, information and belief rather than objective calculations. This
type of probability is often used when there is insufficient data or when
predictions are based on individual belief.

Example: A weather forecaster might say there’s a 70% chance of rain

tomorrow based on their experience and analysis, even though it’s not
derived from a strict calculation.
 Counting Rule

For experiments with a large number of outcomes, it may not be easy to list all
outcomes. In such cases, we may use the counting rule to find the total number
of outcomes.

 If an experiment consists of three steps, and if the first step can result in m
outcomes, the second step in n outcomes, and the third step in k outcomes,
then

Total outcomes for the experiment = m . n . K

Example: Tossing a coin three times

 CONTENTS

 Marginal and Conditional Probability

 Mutually Exclusive Events

 Independent versus Dependent Events

 MARGINAL PROBABILITY
Definition:
Marginal probability is the probability of a single event without
consideration of any other event. Marginal probability is also called simple
probability.

 Shows probability of one characteristic

 No link with other event
 Simple probability of form P(A)

*Will be explained by Example

 MARGINAL PROBABILITY
Suppose all 100 employees of a company were asked whether they are in favor of or
against paying high salaries to CEOs of U.S. companies. Table gives a two-way
classification of the responses of these 100 employees.

 Totals of rows and columns show one event and one characteristic
 Probability of cells containing totals of rows and columns is Marginal
MARGINAL PROBABILITY
 CONDITIONAL PROBABILITY

Definition:
Conditional probability is the probability that an event will occur given that another event
has already occurred. If A and B are two events, then the conditional probability of A
given B is written as
P (A | B)

 Shows probability of two characteristics

 Gives the probability of an event when another event has already occurred

*Will be explained by Example

CONDITIONAL PROBABILITY
 MUTUALLY EXCLUSIVE EVENTS
Definition:
Events that cannot occur together are said to be mutually exclusive events.

 Events that have uncommon outcomes

 One and only one of any two mutually exclusive events will occur at a time
 MUTUALLY EXCLUSIVE EVENTS
Example:
Outcomes of coin tossed = HH, HT, TH, TT

Example:
Rolling of a die
Event A = {2,4,6}, Event B = {1,3,5}, Event C = {2,4,5}

Events A and B are mutually exclusive

Events A and C are NOT mutually exclusive
 INDEPENDENT VS DEPENDENT EVENTS
Definition:
Two events are said to be independent if the occurrence of one does not affect the
probability of the occurrence of the other. In other words, A and B are independent events if
either
P(A | B) = P(A) or P(B | A) = P(B)

OR

If the occurrence of one event affects the probability of the occurrence of the other event,
then the two events are said to be dependent events.
 INDEPENDENT VS DEPENDENT EVENTS

Example:

Event M = “Males”
Event A = “Against”

Are events M and A independent?

INDEPENDENT VS DEPENDENT EVENTS
 INDEPENDENT VS DEPENDENT EVENTS
Example:

Event A = Parts made by Machine I

Event D = Defective parts

Are two events D and A independent?

INDEPENDENT VS DEPENDENT EVENTS
Complimentary Events
 Complementary Events

Two mutually exclusive events that taken together include all the outcomes for an experiment are called
complementary events. Note that two complementary events are always mutually exclusive.

Because two complementary events, taken together, include all the outcomes for an experiment, the sum of
the probabilities of all outcomes is 1.

EXAMPLE 4–21

In a group of 2000 taxpayers, 400 have been audited by the IRS at least once. If one taxpayer is randomly
selected from this group, what are the two complementary events for this experiment, and what are their
probabilities?
Intersection of Events
&
the Multiplication Rule
 Intersection of Events

Let A and B be two events defined in a sample space. The intersection of A and B represents the collection of
all outcomes that are common to both A and B and is denoted by
A and B

The intersection of events A and B is also denoted by AՈB either

or AB.
 Multiplication Rule
1. For Dependent Events
2. For Independent Events
3. For Mutually Exclusive Events

1. Multiplication Rule for Dependent Events

The probability of the intersection of two events is obtained by multiplying
the marginal probability of one event by the conditional probability of the
second event. This rule is called the multiplication rule.
P(A and B) = P(A) P(B I A)
 Example
Table gives the classification of all employees of a company by gender and college degree.

If one of these employees is selected at random for membership on the employee–

management committee, what is the probability that this employee is a female and
a college graduate?
 2. Multiplication Rule for Independent Events

The foregoing discussion of the multiplication rule was based on the

assumption that the two events are dependent. Now suppose that events
A and B are independent.
Then,
P(A and B) = P(A). P(B)
Example

An office building has two fire detectors. The probability is .02 that any fire
detector of this type will fail to go off during a fire. Find the probability that
both of these fire detectors will fail to go off in case of a fire.
 3. Multiplication Rule for Mutually Exclusive Events

We now know that two mutually exclusive events cannot happen together.
Consequently, their joint probability is zero.

Example
Consider the following two events for an application filed by a person to obtain a
car loan:
A = event that the loan application is approved

R = event that the loan application is rejected

What is the joint probability of A and R?

 Union of Events
&
the Addition Rule
 Union of Events

The union of events A and B is the collection of all outcomes that belong either
to A or to B or to both A and B and is denoted by

A or B
The union of events A and B is also denoted by AUB.

Addition Rule
The method used to calculate the probability of the union of events is
called the addition rule.
 1. Addition Rule for Dependent Events
P(A or B) = P(A) + P(B) - P(A and B)
Thus, to calculate the probability of the union of two events A and B, we add
their marginal probabilities and subtract their joint probability from this sum.

We must subtract the joint probability of A and B from the sum of their
marginal probabilities to avoid double counting because of common
outcomes in A and B.

This is the case where events A and B are not mutually exclusive .
 Example
A university president proposed that all students must take a course in ethics as a
requirement for graduation. Three hundred faculty members and students from
this university were asked about their opinions on this issue. Table gives a two-
way classification of the responses of these faculty members and students.
Find the probability that one person selected at random from these 300 persons
is a faculty member or is in favor of this proposal.
 2. Addition Rule for Mutually Exclusive Events

P(A or B) = P(A) + P(B)

Since the two events are mutually exclusive, there

will be no overlap, and there is no need to subtract
that overlapping part as we did before, in case of
dependent events.
 Example
A university president proposed that all students must take a course in ethics as a
requirement for graduation. Three hundred faculty members and students from this
university were asked about their opinion on this issue. The following table, reproduced
from Table 4.9 in Example 4–30, gives a two-way classification of the responses of these
faculty members and students

What is the probability that a randomly selected person from these 300 faculty members and students is
in favor of the proposal or is neutral?
Thank you!