Probability Concepts: Subjective, Empirical, and Theoretical, Study notes of Statistics

Download Probability Concepts: Subjective, Empirical, and Theoretical and more Study notes Statistics in PDF only on Docsity! Stat 101 – Lecture 20 1 Probability • Subjective (Personal) –Based on feeling or opinion. • Empirical –Based on experience. • Theoretical (Formal) –Based on assumptions. 2 The Deal • Bag o’ chips (poker chips). –Some are red. –Some are white. –Some are blue. • Draw a chip from the bag. 3 The Deal • Draw a red chip win 3 bonus points. • Draw a blue chip win 1 bonus point. • Draw a white chip lose 1 bonus point. Stat 101 – Lecture 20 4 Is this a good deal? • Subjective (personal) probability –Based on your beliefs and opinion. • Empirical probability –Based on experience. –Conduct a series of trials. –Each trial has an outcome (R, W, B). 5 Empirical Probability • Look at the long run relative frequency of each of the outcomes. –Blue –Red –White 6 Theoretical Probability • Look in the bag and see how many – Blue chips – – Red chips – – White chips – • Assumption – Each chip has the same probability of being chosen. Equally likely.