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Probability Distribution

The document discusses random variables, including examples of discrete and continuous types, and their probability distributions. It explains specific distributions like uniform, binomial, and Poisson, along with concepts such as Probability Mass Function (PMF) and Cumulative Distribution Function (CDF). Additionally, it provides examples and exercises related to these distributions and their applications.

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6 views20 pages

Probability Distribution

The document discusses random variables, including examples of discrete and continuous types, and their probability distributions. It explains specific distributions like uniform, binomial, and Poisson, along with concepts such as Probability Mass Function (PMF) and Cumulative Distribution Function (CDF). Additionally, it provides examples and exercises related to these distributions and their applications.

Uploaded by

rgrewal112233
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Random Variables

Random Variables
•
Random Variables: Example
• A life insurance agent has two Event Probability
elderly clients with policy Y (Younger one dies) P(Y) = 0.05
value of Rs 1 crore upon O (Older one dies) P(O) = 0.10
death
• Y and O are independent
Random Probability Calculation Result
• X = Random variable Variable X =
representing the amount of 0 (Nobody P(YcOc) 0.95 x 0.90 0.855 or 85%
money paid out (in crores) dies)
based on who dies
1 (One of P(YOc) + (0.05 x 0.90) + 0.140 or 14%
• Possible values for X: 0, 1, 2 them dies) P(YcO) (0.95 x 0.10)
crore 2 (Both die) P(YO) 0.05 x 0.10 0.005 or 0.5%
Random Variable Types
• Discrete random variable: Can only take on countable number of
possible values
• Credit ratings: AAA, AA, B, BBB, etc
• Number of orders received on a shopping website (0, 1, 2, 3, …)
• Customer churn: 0 = no churn, 1 = churn
• Continuous random variable: Can take on any value in a certain
interval
• Market share of a company (Infinite possible values between 0% and 100%,
e.g. 45.123%)
• Time taken to place an online order (e.g. 2.5 minutes or 2.55 minutes, etc)
• Waiting time at an ATM (e.g. 30.2 seconds or 45.76 seconds, etc)
Probability Distribution
• Distribution: Describes all the probable outcomes of a variable
• Discrete distribution: Sum of all individual probabilities = 1
• Continuous distribution: Total area under the probability curve (density) = 1
Probability Distribution Types and
Estimations Probability
Distribution Types

Discrete Continuous

Uniform Binomial Poisson Uniform Normal

Probability Mass Function (PMF) Probability Density Function (PDF)

Cumulative Distribution Function (CDF)


Discrete Distributions:
(1) Uniform Distribution
• Note: Uniform Distribution can also fall under continuous probability distributions category,
depending on what we are measuring. If the observations are not discrete, a uniform
distribution becomes continuous.
• Uniform Discrete Distribution: Throw of a dice (exactly 1, 2, …, 6)
• Uniform Continuous Distribution: Time taken by a flight (can go up to nano seconds and
beyond)
Uniform Distribution
• Rolling a fair die: 6 discrete, equally probable outcomes
• We can roll a 1 or 2, but not 1.5
• The probabilities of each outcome are evenly distributed across the
sample space
• Code: C:\code\Data Analytics\uniform_dist.py
Uniform Distribution
• Rolling a die has 6 equal probabilities and their total adds to 1
Discrete Distributions:
(2) Binomial Distribution
Binomial Distribution
•
Binomial Distribution Formula
Problem: Calculate the probability that 3 out of 5
Number of Probability that
• liking students like Python, when in general 66% students
students someone likes
Python, e.g. 3 Python, e.g. 66%
like Python

Probability

Number of
students we
asked, e.g. 5
Binomial Distribution Example
•

Result: Binomial Probability Mass Function (PMF)


Exercise (Solve + Code)
•
Understanding PMF and CDF
• Probability Mass Function (PMF): Probability at a specific point
• Cumulative Distributed Function (CDF): Cumulative probability up to a
specific point
• Example: Consider tips dataset
• Suppose we define success as tip >= 15% of the total bill amount
• PMF = Probability for each possible number of successful tips, e.g.
• P(X=0) -> Probability that none of the tips are at least 15%
• P(X=1) -> Probability that exactly one tip is at least 15%
• P(X=2) -> Probability that exactly two tips are at least 15%
• … up to the total number of tips
• CDF = Cumulative probability at that point
Plotting PMF and CDF
• Now calculate the probability that we will get this success in 60 or 65
out of 100 customer visits
• Plot PDF and CDF and highlight these points (60 and 65) on the plot

• Exercise: Calculate overall survival rate in titanic dataset and plot the
PDF and CDF
Discrete Distributions:
(3) Poisson Distribution
Poisson Distribution
•
Poisson Distribution
•
Geometric Distribution
•

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