Poisson Distribution Explanation

a complete detailed information Poission Distribution

Here is a complete and detailed explanation of the Poisson Distribution, ideal for
graduate-level statistics or public administration courses:

📌 Poisson Distribution: Complete and Detailed

Explanation

📖 1. Introduction
The Poisson Distribution is a discrete probability distribution that expresses the probability
of a given number of events occurring in a fixed interval of time or space, if these events
occur with a known constant mean rate and independently of the time since the last
event.

🔢 2. Conditions for Using the Poisson Distribution

The Poisson distribution is applicable if:

1. Events occur independently.

2. The average rate (λ) of occurrence is constant.

3. Two events cannot occur simultaneously.

4. The probability of an event occurring in a short interval is proportional to the length of

the interval.

📐 3. Mathematical Formula
The probability of observing x events in an interval is given by:
λ

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 e−λ λx
P (X = x) =
x!
​

Where:

X = random variable (number of occurrences),

λ = mean number of occurrences in the interval,
e ≈ 2.71828 (Euler's number),
x! = factorial of x.

📈 4. Properties of Poisson Distribution

Property Description

Mean (Expected value) E(X) = λ

Variance Var(X) = λ

Standard Deviation σ= λ ​

Mode ⌊λ⌋ or ⌊λ⌋ − 1 (if not an integer)

Skewed right when λ is small.

Becomes approximately normal when λ > 10.

🧠 5. Intuitive Understanding
Imagine you're counting:

The number of emails you get in an hour,

The number of cars passing a checkpoint in 10 minutes,

The number of calls at a call center per minute.

If those events occur randomly but at a roughly constant average rate, they follow a Poisson
distribution.

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📊 6. Examples
Example 1:

Suppose an average of 4 customers arrive at a store per hour. What’s the probability exactly 2
customers arrive in an hour?

Given: λ = 4, x = 2

e−4 ⋅ 42 e−4 ⋅ 16 0.0183 ⋅ 16

P (X = 2) = = ≈ = 0.1465
2! 2 2
​ ​ ​

Example 2:

A website gets 3 hits per minute. What is the probability that no one visits it in a minute?

e−3 ⋅ 30
P (X = 0) = = e−3 ≈ 0.0498
0!
​

🔄 7. Relation to Other Distributions

Distribution Relationship

Binomial Distribution Poisson is a limit of the binomial:

limn→∞ B(n, nλ ) = P (λ)
​ ​

Normal Distribution Poisson approximates normal when λ > 10:

X ∼ N (λ, λ)

Exponential Distribution Time between Poisson events is exponentially distributed.

🧮 8. Cumulative Distribution Function (CDF)

The CDF of a Poisson distribution is:
x
e−λ λk
P (X ≤ x) = ∑
k!
​ ​

k=0

This is typically computed using statistical software or tables.

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🖥 9. Use in Real Life
Field Application

Public Health Number of disease outbreaks per region per year

Traffic Engineering Number of accidents at an intersection per month

Business/Marketing Number of sales calls received per hour

Quality Control Number of defects in a length of manufactured material

Web Analytics Number of page views per minute

📦 10. Implementation in Software

Python:

python

from scipy.stats import poisson

# Probability of exactly 3 events when λ=5

poisson.pmf(3, mu=5)

# Cumulative probability P(X ≤ 3)

poisson.cdf(3, mu=5)

R:

dpois(3, lambda = 5) # P(X = 3)

ppois(3, lambda = 5) # P(X ≤ 3)

📚 11. Assumptions
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 1. Events are independent.

2. Rate (λ) is constant over time/space.

3. Events occur one at a time.

4. Applicable to rare or infrequent events.

⚠️ 12. Limitations
Not suitable if:

Events are not independent.

Variability is greater than the mean (over-dispersion).

Events occur in bursts rather than randomly.

In such cases, alternatives like Negative Binomial or Compound Poisson may be better.

📄 13. Common Questions (with Answers)

Question Answer

Can λ be a decimal? Yes, λ can be any positive real number.

What happens if λ = 0? Only P (X = 0) = 1; all others are 0.

Is the Poisson symmetric? No, it's right-skewed unless λ is large.

Is variance always equal to mean? Yes, exactly in a Poisson distribution.

🔍 14. Reference Textbooks

1. Sheldon M. Ross – Introduction to Probability Models

2. William Feller – An Introduction to Probability Theory and Its Applications

3. Hogg & Tanis – Probability and Statistical Inference

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 4. Walpole & Myers – Probability and Statistics for Engineers and Scientists

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🔄 15. Derivation of the Poisson Distribution (from

Binomial Distribution)
The Poisson distribution can be derived as a limiting case of the Binomial distribution.

Binomial Distribution:

n
P (X = x) = ( )px (1 − p)n−x
x
​

Let:

n→∞
p→0
Such that λ = n ⋅ p is constant

Then,

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 n x e−λ λx
lim ( ) p (1 − n−x
p) =
n→∞ x x!
​ ​ ​

Thus, the Poisson distribution is a limiting form of the binomial distribution when the
number of trials becomes large and the probability of success in each trial becomes small.

📏 16. Interarrival Times: Link to the Exponential

Distribution
If events occur according to a Poisson process, then the time between two consecutive
events follows an Exponential distribution with parameter λ.

Exponential PDF:

f (t) = λe−λt , t≥0

This means:

Poisson: counts the number of events in a time interval

Exponential: models the waiting time between events

🔁 17. Poisson Process

A Poisson process is a stochastic process that counts the number of events in non-
overlapping intervals. It satisfies:

1. N (0) = 0
2. Independent increments: the number of events in disjoint intervals are independent

3. Stationary increments: the probability depends only on the length of the interval

4. The number of events in a small interval Δt is approximately λΔt

It forms the basis for many advanced topics like queuing theory, reliability theory, and
stochastic modeling.

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🧮 18. Moment Generating Function (MGF)
The MGF of the Poisson distribution is:

MX (t) = E[etX ] = exp (λ(et − 1))

​

From the MGF, you can derive all moments (mean, variance, etc.).

🔣 19. Probability Generating Function (PGF)

GX (s) = E[sX ] = exp(λ(s − 1))
​

Useful in branching processes and stochastic modeling.

🧩 20. Skewness and Kurtosis

Skewness: 1
λ
​

Kurtosis (Excess): 1λ ​

As λ → ∞, both approach 0 (normal distribution).

⚙️ 21. Overdispersion and Underdispersion

Definitions:
Poisson: mean = variance

Overdispersion: variance > mean

Underdispersion: variance < mean

In real data, overdispersion is common. Alternative models include:

Negative Binomial Distribution (for overdispersed data)

Zero-Inflated Poisson (ZIP) models (for excess zeros)

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🧠 22. Parameter Estimation
If you have a sample X1 , X2 , ..., Xn from a Poisson distribution:
​ ​ ​

MLE (Maximum Likelihood Estimator):

n
^ 1
λ = ∑ Xi = Xˉ
n
​ ​ ​

i=1

Thus, the sample mean is the best estimate of λ.

🧪 23. Goodness-of-Fit Test (Chi-Square)

To check if data follows a Poisson distribution:

1. Compute expected frequencies using ^

λ
2. Use Chi-square test:

2 (Oi − Ei )2
χ =∑
​ ​

Ei
​

Degrees of freedom: (number of categories – 1 – number of estimated parameters)

Compare with critical χ2 value

💻 24. Poisson Regression (Generalized Linear Model -

GLM)
Used when the dependent variable is a count.

Model:

log(μi ) = β0 + β1 X1i + ⋯ + βk Xki

​ ​ ​ ​ ​ ​

Link function: log

Distribution: Poisson

Application: Modeling number of accidents, doctor visits, etc.

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🔍 25. Real-life Data Examples
Application Description

Health Number of COVID-19 cases per day

Education Number of students absent per class

Emergency services Number of ambulance calls per hour

Insurance Number of claims filed per policyholder

E-commerce Number of product views per session

📎 26. Tools for Analysis

Tool How to Use

Excel POISSON.DIST(x, mean, cumulative)

R dpois(), ppois(), rpois()

Python scipy.stats.poisson

SPSS Poisson regression under Generalized Linear Models

STATA poisson depvar indepvars

SAS proc genmod

🧾 27. Summary Table

Feature Value

Distribution Type Discrete

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Feature Value

Support x = 0, 1, 2, ...

Mean λ

Variance λ

Skewness 1/ λ ​

t
MGF eλ(e −1)

PGF eλ(s−1)

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📚 28. Types of Poisson Distributions

(a) Homogeneous Poisson Distribution
The rate λ is constant over time or space.

Basic Poisson distribution used in most problems.

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(b) Non-Homogeneous (Inhomogeneous) Poisson Distribution
The rate λ(t) varies over time.

Used in real-world situations where event rates change over time.

[Λ(t)]k e−Λ(t)
P (X(t) = k) =
k!
​

t
Where Λ(t) = ∫0 λ(u) du
​

Used in:

Time-varying call arrival rates in telecom.

Epidemic modeling where infection rate changes.

🧠 29. Compound Poisson Distribution

When the number of events is Poisson distributed, and each event has a random size (not
necessarily 1), the total sum becomes a Compound Poisson Distribution.

Example: In insurance,

Claims arrive as a Poisson process,

But claim amounts vary → total cost is compound Poisson.

Mathematically:
If N ∼ Poisson(λ), and Yi are i.i.d. with mean μ, then:
​

N
S = ∑ Yi ​ ​

i=1

🔀 30. Mixed Poisson Distributions

When the Poisson rate λ itself follows a probability distribution (e.g., Gamma), the result is a
Mixed Poisson Distribution.

Example: Negative Binomial as Mixed Poisson

If:

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 λ ∼ Gamma(α, β)
X ∼ Poisson(λ)

Then:
β
X ∼ Negative Binomial(α, 1+β ) ​

This allows modeling overdispersed count data.

🧪 31. Simulation of Poisson Process

To simulate a Poisson process in programming (like in Python):

Using Interarrival Times (Exponential Distribution):

python

import numpy as np

# Simulate Poisson process with rate lambda = 5

lambda_rate = 5
n_events = 100
interarrival_times = np.random.exponential(1/lambda_rate, n_events)
arrival_times = np.cumsum(interarrival_times)

This gives timestamps of 100 Poisson events.

📊 32. Poisson vs. Other Discrete Distributions

Feature Poisson Binomial Geometric Negative Binomial

Events Count per Count in fixed Trials to first Trials to r th

interval trials success success

Parameter λ n, p p r, p

Support x = 0, 1, 2, … x = 0, ..., n x = 1, 2, … x = 0, 1, 2, …

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Feature Poisson Binomial Geometric Negative Binomial

Mean λ np 1/p r(1 − p)/p

Variance λ np(1-p) (1 − p)/p2 r(1 − p)/p2

🧠 33. Use in Public Administration

In public service contexts, Poisson models help analyze:

Number of citizen complaints per ward per month

Number of births/deaths in local health facilities

Number of road accidents per district

Queue modeling in public service centers

It helps forecast, allocate resources, and assess service load.

📌 34. Confidence Intervals for Poisson Mean (λ)

If you observe x events, a 100(1 – α)% CI for λ is:

Exact (based on Chi-square):

1 1
( χ22x,α/2 , χ22x+2,1−α/2 )
2 2
​ ​ ​ ​

Used when x is small.

Approximate (Normal Approximation):

^
λ ± zα/2 ​
^
λ/n ​

Valid when x > 30.

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🔍 35. Poisson vs. Exponential (Time vs. Count)
Concept Poisson Distribution Exponential Distribution

What it models Number of events in a fixed time Time between events

Type Discrete Continuous

Parameter λ λ

e−λ λx
Distribution P (X = x) = x!
​ f (t) = λe−λt

🎯 36. Real-World Case Study Example

Case: Emergency Room Visits at a Hospital
On average, 7 patients arrive per hour.

Over a week (168 hours), hospital management wants to estimate staffing.

Using Poisson:

λ=7
P (X > 10) = 1 − P (X ≤ 10)

This can help decide how many doctors/nurses to assign during peak hours.

🛠 37. Extensions of Poisson Models

Model Purpose

Zero-Inflated Poisson (ZIP) Adjust for excessive zeros in data

Poisson Regression with Offset Adjust for exposure time/area

Hierarchical Poisson Models Multi-level modeling in grouped data

Spatio-temporal Poisson Models Count data over both space and time

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📎 38. Key Applications by Field
Field Application

Public Health Number of malaria cases per village

Traffic Management Vehicles crossing toll per minute

Call Centers Incoming calls per agent per hour

IT Systems Server failure frequency

Disaster Management Earthquakes per region per year

Crime Analysis Number of thefts reported in wards

Public Utilities Number of electricity outages per week

📘 39. Further Reading & Research Papers

1. Cameron & Trivedi – Regression Analysis of Count Data

2. King, G. (1989). Variance Function Models for Count Data

3. Zeileis et al. – Modeling Count Data in R

4. Sellers & Shmueli – The COM-Poisson Regression Model

📌 40. Summary
Poisson distribution models the number of events in fixed intervals.

Assumes constant average rate and independent occurrences.

It’s fundamental in statistics, machine learning, and public policy modeling.

Variants and extensions accommodate real-world complexities like overdispersion and

zero inflation.

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🧮 41. Connections to Other Distributions

(a) Poisson as a Sum of Independent Bernoulli Trials
Poisson distribution arises when you sum a large number of independent rare
Bernoulli trials with small success probabilities.

If Xi ​ ∼ Bernoulli(pi ), and ∑ pi = λ, then under suitable conditions:

​ ​

d
∑ Xi ​ ​ Poisson(λ)

This is useful in rare event modeling, e.g., defects in manufacturing.

(b) Poisson Limit Theorem (Law of Rare Events)

As n → ∞ and p → 0 such that np = λ, then:

Binomial(n, p) → Poisson(λ)

Used in approximating rare but numerous trials, like:

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 Number of typing errors in books

Number of mutations in genes

📐 42. Deviance and Diagnostics in Poisson Regression

When fitting a Poisson model (e.g., via GLM), it’s critical to assess fit:

Key Tools:
Diagnostic Meaning

Deviance Measures how well the model fits data; like residual sum of squares

Pearson Chi-Square Tests goodness-of-fit

Residual Deviance
Dispersion Parameter ϕ= df
​ ; if >1 → overdispersion

Cook’s Distance Influential observations

📊 43. Visualization of Poisson Data

Common Plots:
Histogram of observed counts

Poisson probability mass function (PMF) overlay

Rootogram: compares observed vs. expected frequencies

Q-Q plot: Poisson quantiles vs. observed data

These help assess:

Fit

Outliers

Distributional assumptions

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🧠 44. Maximum Likelihood Estimation (MLE) Derivation
Given X1 , X2 , ..., Xn
​ ​ ​ ∼ Poisson(λ), the likelihood is:
n
e−λ λxi
L(λ) = ∏
​

xi !
​ ​

i=1
​

log L(λ) = −nλ + log(λ) ∑ xi + const ​

Taking derivative and setting to zero:

d 1
log L(λ) = −n + ∑ xi = 0 ⇒ ^
λ = xˉ
dλ λ
​ ​ ​

Thus, the sample mean is the MLE for λ.

💡 45. Bayesian Poisson Modeling

In Bayesian statistics, you assume a prior for λ, typically:

Gamma prior: λ ∼ Gamma(α, β)

Then the posterior is also Gamma:

λ ∣ data ∼ Gamma (α + ∑ xi , β + n) ​

Used in:

Hierarchical modeling

Credible intervals

Forecasting in uncertain environments

🏢 46. Poisson Models in Operations Research

Used to analyze:

Queuing systems (e.g., M/M/1, M/M/c queues)

Inventory control

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 Call center staffing

Machine breakdowns

Assumptions:

Arrivals follow Poisson

Service times may be exponential

⚙️ 47. Poisson in Reliability Engineering

Failure of components in time or space

Number of system breakdowns

Mean Time Between Failures (MTBF) = 1/λ

If failures follow a Poisson process:

Probability of no failure in t: P (0) = e−λt

🧮 48. Moment Properties

Let X ∼ Poisson(λ)
Moment Value

E[X] λ

E[X 2 ] λ2 + λ

Var(X) λ

Skew(X) 1/ λ ​

Kurtosis 3 + 1/λ

All moments are increasing in λ.

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📖 49. Poisson Thinning Property
Suppose X ∼ Poisson(λ), and each event is independently retained with probability p, then:
The number of retained events: Poisson(pλ)

The number of removed events: Poisson((1 − p)λ)

Used in:

Sampling from processes

Separating calls by type (sales vs. support)

🌐 50. Poisson Distribution in Multivariate Context

When modeling joint counts, extensions include:

Multivariate Poisson distribution

Copula models for count data

Bivariate Poisson regression

These model correlation between counts:

e.g., number of calls and number of orders per hour

📦 Final Thought: Poisson is Simple but Powerful

Despite being based on a single parameter, the Poisson distribution underlies some of the
most powerful modeling tools in applied statistics, data science, economics, epidemiology,
engineering, and operations.

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