In this pose, we will discuss the conditional probability formula and related real-life practical examples. Conditional probability is a fundamental concept in probability theory that deals with the likelihood of an event occurring given that another event has already happened.
Introduction Conditional Probability
A conditional probability for an event is computed when some additional (prior) information about the experiment’s outcome is known. Suppose, there are two events $A$ and $B$ for an experiment. Also, suppose that it is known that event $B$ has occurred. One can calculate the probability of Event $A$ based on the formation of the event $B$. This probability is called the conditional probability of $A$ given $B$. The conditional probability of $A$ given $B$ is denoted by $P(A|B)$.
The Conditional Probability Formula
For event $A$ and $B$, where the event $B$ has already occurred, the Conditional Probability Formula can be described as
$$P(A|B) = \frac{P(A \cap B)}{P(B)}, \quad provided\,\, that\,\, P(B)\ne 0 $$
- $P(B∣A)$ is the probability of event $B$ occurring given that event $A$ has occurred.
- $P(A∩B)$ is the probability of both events $A$ and $B$ occurring.
- $P(A)$ is the probability of event $A$ occurring.
Numerical Example of Conditional Probability
Consider the experiment of drawing two cards from a standard deck of cards without replacement. Let event $A$ be the event that the first card drawn is kind, and we are interested in calculating the probability of the event $B$ the second card drawn will also be a king card provided that the first card drawn was a king. We can conclude here that
\begin{align*}
P(A) &= P(\text{first card drawn is king}) =\frac{\text{Total number of cards}}{\text{Number of kings}}​=\frac{4}{52}=\frac{1}{13}\\
P(A∩B) &=\frac{4}{52}\times \frac{3}{51} ​= \frac{1}{221}\\
P(B|A) &= \frac{P(A\cap B}{P(B)} = \frac{1/221}{1/13} = \frac{1}{17}​
\end{align*}
Note that in the conditional probability Formula, $P(A∩B)$ is the probability that the first card is a king and the second card is also a king. Since the first card drawn is a king, there are now 3 kings left in the remaining 51 cards.
Therefore, the probability that the second card drawn is a king, given that the first card drawn was a king, is $\frac{1}{17}$.
Real-Life Examples of Conditional Probability
The following are some important real-life and practical examples of conditional probability from various fields of life.
- Election Polling: A pollster predicts the outcome of an election. The probability that a voter will support a candidate given that they belong to a specific demographic group (e.g., age, gender, income level). For example, If 60% of voters aged 18-24 support Candidate A, then the conditional probability of supporting Candidate A given that the voter is aged 18-24 is 60%.
- Weather Forecasting: A weather forecast is used to predict the probability of rain. One can compute the probability that it will rain given that the sky is cloudy using the conditional probability formula. For example, suppose that the historical data shows that it rains 30% of the time when the sky is cloudy, then the conditional probability of rain given cloudy skies is 30%.
- Sports Analytics: A basketball player takes a shot. The likelihood of an event that the player makes the shot given that they are shooting from a specific distance. For example, if a certain player makes 40% of their three-point shots, then the conditional probability of making a shot given that it is a three-point attempt is 40%.
- Customer Behavior: A retail store analyzes customer purchasing behavior. They can find the probability that a customer will buy a product given that they have viewed it online. As an example, suppose that 10% of customers who view a product online end up purchasing it, then the conditional probability of a purchase given that the product was viewed online is 10%.
- Quality Control in Manufacturing: Items produced in a factory can be either defective or non-defective. The likelihood of an event that an item produced is defective given that it was produced by a specific machine will make use of the conditional probability formula. For example, if Machine A produces defective items 5% of the time, then the conditional probability that an item is defective given that it was produced by Machine A is 5%.
- Traffic Light Timing: A city adjusts the timing of traffic lights to reduce congestion. The conditional probability can be used to compute the probability that a car will stop at a red light given that it is during rush hour. For example, if 70% of cars stop at a red light during rush hour, then the conditional probability of stopping at a red light given that it is rush hour is 70%.
- Spam Filtering: An email service filters out spam emails. The conditional probability formula can be used to compute the probability that an email is spam given that it contains certain keywords (e.g., “free,” “win,” “prize”). For example, if 90% of emails containing the word “free” are spam, then the conditional probability that an email is spam given that it contains the word “free” is 90%.
- Insurance Risk Assessment: Insurance companies assess the risk of insuring a driver. One can find the probability that a driver will have an accident given that they are under 25 years old. For example, If statistics show that drivers under 25 are involved in 20% of all accidents, then the conditional probability of an accident given that the driver is under 25 is 20%.
- Credit Scoring: The bank assesses the creditworthiness of a loan applicant. The conditional probability is used to compute the probability that an applicant will default on a loan given that they have a low credit score. As an example, suppose, 15% of applicants with a credit score below 600 default on their loans, then the conditional probability of default given a low credit score is 15%.
- Medical Testing: Suppose, A patient takes a medical test to determine if they have a certain disease. The probability that the patient has the disease given that the test result is positive. As an example, consider the prevalence of a disease is 1% in the population, and the test has a 99% accuracy rate (both true positive and true negative rates are 99%). The conditional probability that a person has the disease given a positive test result can be computer using the Bayes’ Theorem.
These real-life examples of conditional probability illustrate how conditional probability is used to make informed decisions and predictions in various fields of life by considering the relationship between different events or conditions.
FAQs about Conditional Probability and Conditional Probability Formula
- Write down the conditional probability formula.
- Describe the numerator and denominator in the conditional probability formula.
- Give some real-life examples that make use of the conditional probability formula.
- What is a prior probability.
- How conditional probability can be used to make informed decisions and predictions? Explain.
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