As an example, Bayes' theorem can be used to determine the accuracy of medical test results by taking into consideration how likely any given person is to have a disease and the general accuracy of the test. Bayes' theorem relies on incorporating prior probability distributions in order to generate posterior probabilities. Prior probability, in Bayesian statistical inference, is the probability of an event before new data is collected. This is the best rational assessment of the probability of an outcome based on the current knowledge before an experiment is performed.
Posterior probability is the revised probability of an event occurring after taking into consideration new information. Posterior probability is calculated by updating the prior probability by using Bayes' theorem.
In statistical terms, the posterior probability is the probability of event A occurring given that event B has occurred. Bayes' theorem thus gives the probability of an event based on new information that is, or may be related, to that event. The formula can also be used to see how the probability of an event occurring is affected by hypothetical new information, supposing the new information will turn out to be true.
For instance, say a single card is drawn from a complete deck of 52 cards. Remember that there are four kings in the deck. Now, suppose it is revealed that the selected card is a face card. The probability the selected card is a king, given it is a face card, is four divided by 12, or approximately Below are two examples of Bayes' theorem in which the first example shows how the formula can be derived in a stock investing example using Amazon. The second example applies Bayes' theorem to pharmaceutical drug testing.
Bayes' theorem follows simply from the axioms of conditional probability. Conditional probability is the probability of an event given that another event occurred. For example, a simple probability question may ask: "What is the probability of Amazon.
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By Duke Today Staff. Image from Wikimedia Commons An early 18th century English mathematician and Presbyterian minister, Thomas Bayes never used the phrase Bayesian analysis. I object to the attitude that the data model is assumed correct while the prior distribution is suspect. Are Brains Bayesian? The views expressed are those of the author s and are not necessarily those of Scientific American.
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