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Chapter Three
Probability

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McGraw-Hill/Irwin

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Probability
The Concept of Probability
3.2 Sample Spaces and Events
3.3 Some Elementary Probability
Rules
3.4 Conditional Probability and
Independence
3.1

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3.1 Probability Concepts

An experiment is any process of

observation with an uncertain outcome.
The possible outcomes for an experiment
are called the experimental outcomes.
Probability is a measure of the chance that
an experimental outcome will occur when an
experiment is carried out
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Probability
If E is an experimental outcome, then P(E) denotes the
probability that E will occur and
Conditions
0 P( E ) 1
If E can never occur, then P(E) = 0
If E is certain to occur, then P(E) = 1

The probabilities of all the experimental outcomes must

sum to 1.
Interpretation: long-run relative frequency or
subjective
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3.2 The Sample Space

The sample space of an experiment is the set of
all experimental outcomes.
Example 3.2: Genders of Two Children

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Computing Probabilities of Events

An event is a set (or collection) of

experimental outcomes.

The probability of an event is the sum of

the probabilities of the experimental
outcomes that belong to the event.

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Example: Computing Probabilities

Example 3.4: Genders of Two Children

Events
P(one boy and one girl) =
P(BG) + P(GB) = + =
P(at least one girl) =
P(BG) + P(GB) + P(GG) = + +
=
Note:

Experimental Outcomes: BB, BG, GB, GG

All outcomes equally likely: P(BB) = = P(GG) =

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Probabilities: Equally Likely Outcomes

If the sample space outcomes (or experimental

outcomes) are all equally likely, then the probability
that an event will occur is equal to the ratio
the number of sample space outcomes that correspond to the event
The total number of sample space outcomes

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Example: AccuRatings Case

Of 5528 residents
sampled, 445 prefer
KPWR.
Estimated Share:
P(KPWR) = 445/5528
= 0.0805

Assuming 8,300,000 Los Angeles residents aged 12 or older:

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Listeners = Population x Share = 8,300,000 x 0.08 =

668,100

3.3 Event Relations

A
The complement
of an event A is the set of
all sample space outcomes not in A.
Further,P(A) = 1 - P(A)
Union of A and B,A B
Elementary events that
belong to either A or B (or
both.)
A B
Intersection of A and B,
Elementary events that
belong to both A and B.
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The Addition Rule for Unions

The probability that A or B (the union of A and B) will occur is

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

A and B are mutually exclusive if they have no sample space
outcomes in common, or equivalently if

P(A B) = 0

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3.4 Conditional Probability

The probability of an event A, given that the event B
has occurred is called the conditional probability
of A given B and is denoted as
. Further,
P(A | B)

P(A B)
P(A|B) =
P(B)

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Independence of Events
Two events A and B are said to be
independent if and only if:
P(A|B) = P(A) or, equivalently,
P(B|A) = P(B)

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The Multiplication Rule for

Intersections
The probability that A and B (the intersection of A and B) will occur is

P(A B) = P(A) P(B | A)

= P(B) P(A | B)
If A and B are independent, then the probability that A and B (the
intersection of A and B) will occur is

P(A B) = P(A) P(B) P(B) P(A)

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Contingency Tables
P(R1 )

P(R1 C1 )

R1
R2
Total
P(R 2 C 2 )
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C1
.4
.1
.5

C2
.2
.3
.5

Total
.6
.4
1.00
P(C 2 )

Example: AccuRatings Case

Example 3.16: Estimating Radio Station Share by Daypart

5528 L.A. residents

sampled.
2827 of residents sampled
listen during some portion
of the 6-10 a.m. daypart.
Of those, 201 prefer KIIS.
KIIS Share for 6-10 a.m. daypart:
P(KIIS|6-10 a.m.) = P(KIIS 6-10 a.m.) / P(6-10 a.m.)
= (201/5528) (2827/5528) = 201/2827 =
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0.0711

Probability
Summary
3.1
: The Concept of Probability
3.2 Sample Spaces and Events
3.3 Some Elementary Probability Rules
3.4 Conditional Probability and Independence

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