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Bayes Theorem

Bayes' theorem describes the probability of an event based on prior knowledge and conditions related to the event. It allows calculation of the probability of an individual's risk as more accurate than just assuming population risk. The theorem provides a way to update probabilities based on new information or evidence. For example, it can be used to calculate the increased probability of a driver winning a race given new information about rain conditions favoring that driver.

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64 views4 pages

Bayes Theorem

Bayes' theorem describes the probability of an event based on prior knowledge and conditions related to the event. It allows calculation of the probability of an individual's risk as more accurate than just assuming population risk. The theorem provides a way to update probabilities based on new information or evidence. For example, it can be used to calculate the increased probability of a driver winning a race given new information about rain conditions favoring that driver.

Uploaded by

Captain reborn
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Bayes' theorem

In probability theory and statistics, Bayes' theorem (alternatively Bayes' law or Bayes' rule;
recently Bayes–Price theorem ), named after Thomas Bayes, describes the probability of an event,
based on prior knowledge of conditions that might be related to the event. For example, if the risk of
developing health problems is known to increase with age, Bayes' theorem allows the risk to an
individual of a known age to be assessed more accurately (by conditioning it on their age) than
simply assuming that the individual is typical of the population as a whole.

• P(A|B) is a conditional probability: the probability of event A occurring given that B is


true. It is also called the posterior probability of A given B.
• P(B|A) is also a conditional probability: the probability of event B occurring given that A is
true. It can also be interpreted as the likelihood of A given a fixed B because P(B|A) = L
(A|B)
• P(A) and P(B) are the probabilities of observing A and B respectively without any given
conditions; they are known as the marginal probability or prior probability.

Frequentist Statistics tests whether an event (hypothesis) occurs or not. It calculates the probability
of an event in the long run of the experiment (i.e the experiment is repeated under the same
conditions to obtain the outcome).

Here, the sampling distributions of fixed size are taken. Then, the experiment is theoretically
repeated infinite number of times but practically done with a stopping intention. For example, I
perform an experiment with a stopping intention in mind that I will stop the experiment when it is
repeated 1000 times or I see minimum 300 heads in a coin toss.

“Bayesian statistics is a mathematical procedure that applies probabilities to statistical problems. It


provides people the tools to update their beliefs in the evidence of new data.”
Suppose, out of all the 4 championship races (F1) between Niki Lauda and James hunt, Niki won 3
times while James managed only 1.

So, if you were to bet on the winner of next race, who would he be ?

By analysis, you would say Niki Lauda.

But, what if you are told that it rained once when James won and once when Niki won and it is
definite that it will rain on the next date.

By intuition, it is easy to see that chances of winning for James have increased drastically. But the
question is: how much ?

Conditional Probability is defined as the: Probability of an event A given B equals the probability of B
and A happening together divided by the probability of B.”

Let’s try to answer a betting problem with this technique.

Suppose, B be the event of winning of James Hunt. A be the event of raining. Therefore,

1. P(A) =1/2, since it rained twice out of four days.


2. P(B) is 1/4, since James won only one race out of four.
3. P(A|B)=1, since it rained every time when James won.

Substituting the values in the conditional probability formula, we get the probability to be around
50%, which is almost the double of 25% when rain was not taken into account .

This further strengthened our belief of James winning in the light of new evidence i.e rain.

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