Probability: Numerical Likelihood of an Event

Probabilities

Probability: Numerical likelihood of an event

Probability value of 0 - 1, higher values describes a greater chance the event will occur

Classical Interpretation

Equally likely outcomes, probability is divided by the total number of possible outcomes

Frequentist Interpretation

If a process to obtain the probability was repeated in similar conditions a number of times, the probability is the relative frequency of all the tries

Subjective Interpretation

Someone’s degree of belief in the occurrence of the event is the subjective probability

Odds

Probability of event occurring : probability of event not occurring

e.g. Mrs X will survive 5 years: odds of 4 to 1 = probability (survive 5 years) 4/Probability (die within 5 years) 1 = 4/1

Odds >1 (greater than 1) then event is more likely to occur

Odds <1 (less than 1) then event is less likely to occur

To convert odds to a probability:

e.g. Odds of 4 to 1

Probability (event) = A / A+B (A = 4, A + B = 4 + 1)

To convert probability to odds:

A = p/1-p (p = probability)

Not Events

A probability than an event does not occur

Probability (event does not occur) = 1 - Probability (event occurring)

Or Events (Addition