Chapter 4

Basic Probability

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 1

 Objectives

The objectives for this chapter are:

 To understand basic probability concepts.

 To understand conditional probability.

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 2

 Additional Topics Online For
This Chapter

 Bayes Theorem (Section 4.4):

 Has new applications in analyzing big data using
predictive analytics.
 Does not require big data to be used in a variety of
problems.
 Counting Rules (Section 4.5):
 In many cases there are a large number of possible
outcomes.
 Counting rules are useful for determining the exact number
of possible outcomes.

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 3

 Basic Probability Concepts
 Probability – the numerical value representing the
chance, likelihood, or possibility that a certain
event will occur (always between 0 and 1).

 Impossible Event – an event that has no chance

of occurring (probability = 0).

 Certain Event – an event that is sure to occur

(probability = 1).

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 4

 Assessing Probability

There are three approaches to assessing the

probability of an uncertain event:
1. a priori -- based on prior knowledge of the process
X number of ways in which the event occurs
probability of occurrence  T  total number of possible outcomes
Assuming
all
outcomes 2. empirical probability
are number of ways in which the event occurs
equally probability of occurrence 
likely total number of possible outcomes

3. subjective probability

based on a combination of an individual’s past experience,

personal opinion, and analysis of a particular situation.

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 5

 Example of a priori probability

When randomly selecting a day from the year 2016

what is the probability the day is in January?

X number of days in January

Probabilit y of Day In January  
T total number of days in 2016

X 31 days in January 31
 
T 366 days in 2015 366
Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 6
 Example of empirical probability

Find the probability of selecting a male taking statistics

from the population described in the following table:

Taking Stats Not Taking Total

Stats
Male 84 145 229
Female 76 134 210
Total 160 279 439

number of males taking stats 84

Probability of male taking stats    0.191
total number of people 439

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 7

 Subjective probability

 Subjective probability may differ from person to person

 A media development team assigns a 60%

probability of success to its new ad campaign.

 The chief media officer of the company is less

optimistic and assigns a 40% of success to the same

campaign.
 The assignment of a subjective probability is based on a
person’s experiences, opinions, and analysis of a
particular situation.
 Subjective probability is useful in situations when an
empirical or a priori probability cannot be computed.

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 8

 Events
Each possible outcome of a variable is an event.

 Simple event:
 An event described by a single characteristic.
 e.g., A day in January from all days in 2016.
 Joint event:
 An event described by two or more characteristics.
 e.g. A day in January that is also a Wednesday from all days in
2016.
 Complement of an event A (denoted A’):
 All events that are not part of event A.
 e.g., All days from 2016 that are not in January.

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 9

 Sample Space
The Sample Space is the collection of all
possible events.
e.g. All 6 faces of a die:

e.g. All 52 cards of a bridge deck:

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 10

Organizing & Visualizing Events

 Contingency Tables -- For All Days in 2016.

Jan. Not Jan. Total

Wed. 4 48 52
Not Wed. 27 287 314

Total 31 335 366

 Decision Trees. Total

4 Number
Sample Of
Space 27 Sample
All Days Space
In 2016 Outcomes.
48

287

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 11

 Definition: Simple Probability

 Simple Probability refers to the probability of a

simple event.
 ex. P(Jan.).
 ex. P(Wed.).
Jan. Not Jan. Total
P(Wed.) = 52 / 366
Wed. 4 48 52
Not Wed. 27 287 314

Total 31 335 366

P(Jan.) = 31 / 366
Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 12
 Definition: Joint Probability
 Joint Probability refers to the probability of an
occurrence of two or more events (joint event).
 ex. P(Jan. and Wed.).
 ex. P(Not Jan. and Not Wed.).

Jan. Not Jan. Total

P(Not Jan. and Not Wed.)
Wed. 4 48 52
= 287 / 366
Not Wed. 27 287 314

Total 31 335 366

P(Jan. and Wed.) = 4 / 366

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 13
 Mutually Exclusive Events

 Mutually exclusive events:

 Events that cannot occur simultaneously.

Example: Randomly choosing a day from 2016

A = day in January; B = day in February

 Events A and B are mutually exclusive.

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 14

 Collectively Exhaustive Events
 Collectively exhaustive events:
 One of the events must occur.
 The set of events covers the entire sample space.
Example: Randomly choose a day from 2016.

A = Weekday; B = Weekend;
C = January; D = Spring;

 Events A, B, C and D are collectively exhaustive

(but not mutually exclusive – a weekday can be in
January or in Spring).
 Events A and B are collectively exhaustive and
also mutually exclusive.
Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 15
 Computing Joint and
Marginal Probabilities

 The probability of a joint event, A and B:

number of outcomes satisfying A and B
P( A and B) 
total number of elementary outcomes

 Computing a marginal (or simple) probability:

P(A)  P(A and B1)  P(A and B2 )    P(A and Bk )

 Where B1, B2, …, Bk are k mutually exclusive and collectively
exhaustive events.

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 16

Joint Probability Example

P(Jan. and Wed.)

number of days that are in Jan. and are Wed. 4
 
total number of days in 2016 366

Jan. Not Jan. Total

Wed. 4 48 52
Not Wed. 27 287 314

Total 31 335 366

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 17

Marginal Probability Example

P(Wed.)
4 48 52
 P(Jan. and Wed.)  P(Not Jan. and Wed.)   
366 366 366

Jan. Not Jan. Total

Wed. 4 48 52
Not Wed. 27 287 314

Total 31 335 366

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 18

 Marginal & Joint Probabilities In A
Contingency Table

Event
Event B1 B2 Total
A1 P(A1 and B1) P(A1 and B2) P(A1)
A2 P(A2 and B1) P(A2 and B2) P(A2)

Total P(B1) P(B2) 1

Joint Probabilities Marginal (Simple) Probabilities

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 19

 Probability Summary So Far
 Probability is the numerical measure
of the likelihood that an event will 1 Certain
occur.
 The probability of any event must be
between 0 and 1, inclusively.
0 ≤ P(A) ≤ 1 For any event A 0.5
 The sum of the probabilities of all
mutually exclusive and collectively
exhaustive events is 1.
P(A)  P(B)  P(C)  1
0 Impossible
If A, B, and C are mutually exclusive and
collectively exhaustive

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 20

 General Addition Rule

General Addition Rule:

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

If A and B are mutually exclusive, then

P(A and B) = 0, so the rule can be simplified:

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

For mutually exclusive events A and B

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 21

 General Addition Rule Example

P(Jan. or Wed.) = P(Jan.) + P(Wed.) - P(Jan. and Wed.)

= 31/366 + 52/366 - 4/366 = 79/366
Don’t count
the four
Wednesdays
in January
Jan. Not Jan. Total twice!
Wed. 4 48 52
Not Wed. 27 287 314

Total 31 335 366

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 22

 Computing Conditional
Probabilities
 A conditional probability is the probability of one
event, given that another event has occurred:
P(A and B) The conditional
P(A | B)  probability of A given
P(B) that B has occurred.

P(A and B) The conditional

P(B | A)  probability of B given
P(A) that A has occurred.

Where P(A and B) = joint probability of A and B

P(A) = marginal or simple probability of A
P(B) = marginal or simple probability of B
Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 23
 Conditional Probability Example

 Of the cars on a used car lot, 70% have air

conditioning (AC) and 40% have a GPS. 20%
of the cars have both.

 What is the probability that a car has a GPS,

given that it has AC ?

i.e., we want to find P(GPS | AC).

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 24

 Conditional Probability Example
(continued)
 Of the cars on a used car lot, 70% have air conditioning
(AC) and 40% have a GPS and
20% of the cars have both.
GPS No GPS Total
AC 0.2 0.5 0.7
No AC 0.2 0.1 0.3
Total 0.4 0.6 1.0

P(GPS and AC) 0.2

P(GPS | AC)    0.2857
P(AC) 0.7
Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 25
 Conditional Probability Example
(continued)
 Given AC, we only consider the top row (70% of the cars). Of these,
20% have a GPS. 20% of 70% is about 28.57%.

GPS No GPS Total

AC 0.2 0.5 0.7
No AC 0.2 0.1 0.3
Total 0.4 0.6 1.0

P(GPS and AC) 0.2

P(GPS | AC)    0.2857
P(AC) 0.7

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 26

 Using Decision Trees
.2
Given AC or .7 P(AC and GPS) = 0.2
no AC:
P(AC and GPS’) = 0.5
.5
.7
All Conditional
Probabilities
Cars
.2
.3 P(AC’ and GPS) = 0.2

.1 P(AC’ and GPS’) = 0.1

.3
Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 27
 Using Decision Trees (continued)
.2
.4 P(GPS and AC) = 0.2
Given GPS
or no GPS:
P(GPS and AC’) = 0.2
.2
.4
All Conditional
Probabilities
Cars
.5
.6 P(GPS’ and AC) = 0.5

.1 P(GPS’ and AC’) = 0.1

.6
Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 28
 Independence
 Two events are independent if and only
if:

P(A | B)  P(A)
 Events A and B are independent when the probability
of one event is not affected by the fact that the other
event has occurred.

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 29

 Multiplication Rules

 Multiplication rule for two events A and B:

P(A and B)  P(A | B)P(B)

Note: If A and B are independent, then P(A | B)  P(A)

and the multiplication rule simplifies to:

P(A and B)  P(A)P(B)

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 30

 Marginal Probability

 Marginal probability for event A:

P(A)  P(A | B1)P(B1)  P(A | B2 )P(B2 )    P(A | Bk )P(Bk )

 Where B1, B2, …, Bk are k mutually exclusive and

collectively exhaustive events.

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 31

 Ethical Issues & Probability
 Ethical issues can arise when any statements
related to probability are presented to the
public.

 Unintended misinterpretations can occur with

people who are not comfortable with numerical
concepts.

 Advertising quoting probabilities can also be

intentionally misleading.

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 32

 Chapter Summary

In this chapter we covered:

 Understanding basic probability concepts.

 Understanding conditional probability.

Copyright © 2017 Pearson Education, Ltd. Chapter 4 - 33