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This tutorial on Poisson distribution is prepared by the Applied Statistics and Computing lab at the Indian School of Business, Hyderabad. It is a part of the module on Probability and distributions, prepared by us.

- (7) Measures of Central Tendency
- (6) Random Variables and PMF
- (10) Hypergeometric Distribution
- (13) Normal Distribution
- (1) Set Theory
- !Business Statistics
- (9) Geometric and Negative Binomial Distribution
- (8) Binomial Distribution
- (4) Conditional Probability
- (15) Chi-square, Student’s t and Snedecor’s F distributions
- (7) Discrete Uniform Distribution
- (12)Continuous Distributions
- (9) Basic Box-Plot
- (8) Measures of Dispersion
- (11) Notched and Variable Width Box-Plots
- (3) Probability
- (4) Condensation of Data
- (12) Bivariate Data
- (14) Joint Distribution
- (10) Box-Plot With Fences

You are on page 1of 8

Learning goals

To understand the idea behind Poisson distribution To study situations where Poisson distribution can help evaluate probabilities of events

Example

Every day, about 7 million commuters travel on the suburban local trains in Mumbai. On an average, 10 persons die in local train related accidents, every day! Then what is the probability that I will die travelling in the train tomorrow?

Example (contd.)

We can use Binomial distribution to evaluate this probability

Success = death of a person while travelling on the suburban local train, on a given day = = = 7

Prob X = 1 = 7,000,000 10 7,000,000 10 ,, ( ) ( ) 10 7,000,000 7,000,000

4

This is where Poisson distribution comes to rescue! When is very large, is very small (7 million and respectively, in our example) and is finite, the PMF of a variable following Poisson distribution with parameter = is given by = = ! where = 0,1,2,3, and > 0 Here, is the value of average occurrences

Applied Statistics and Computing Lab

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More examples

There are many other situations in which we observe that the total number of trials is very large and the probability of success is very small. Here are some examples:

Probability of finding 1 out of 10 items to be defective, when produced on a machine that produces 0.1% defective items Probability of one of the policy holders of a life insurance plan dying during the next one year Probability of the tubelight in your room going off, when it generally works about 18 months

Applied Statistics and Computing Lab

6

For ~ , = = = It is an important property of Poisson distribution that its mean and variance is equal to each other In case of a Binomial distribution where is very large and is very small, Poisson distribution helps us approximate the probabilities

Applied Statistics and Computing Lab

7

Thank you

- (7) Measures of Central TendencyUploaded byASClabISB
- (6) Random Variables and PMFUploaded byASClabISB
- (10) Hypergeometric DistributionUploaded byASClabISB
- (13) Normal DistributionUploaded byASClabISB
- (1) Set TheoryUploaded byASClabISB
- !Business StatisticsUploaded byJoanne Ferrer
- (9) Geometric and Negative Binomial DistributionUploaded byASClabISB
- (8) Binomial DistributionUploaded byASClabISB
- (4) Conditional ProbabilityUploaded byASClabISB
- (15) Chi-square, Student’s t and Snedecor’s F distributionsUploaded byASClabISB
- (7) Discrete Uniform DistributionUploaded byASClabISB
- (12)Continuous DistributionsUploaded byASClabISB
- (9) Basic Box-PlotUploaded byASClabISB
- (8) Measures of DispersionUploaded byASClabISB
- (11) Notched and Variable Width Box-PlotsUploaded byASClabISB
- (3) ProbabilityUploaded byASClabISB
- (4) Condensation of DataUploaded byASClabISB
- (12) Bivariate DataUploaded byASClabISB
- (14) Joint DistributionUploaded byASClabISB
- (10) Box-Plot With FencesUploaded byASClabISB
- (2) Permutations and CombinationsUploaded byASClabISB
- (1) IntroductionUploaded byASClabISB
- (6) Graphical Presentation 2Uploaded byASClabISB
- (5) Bayes' RuleUploaded byASClabISB
- R TutorialUploaded byASClabISB
- (3) Methods of Data CollectionUploaded byASClabISB
- (8b) Grouped Data_central Tendency and DispersionUploaded byASClabISB
- (5) Graphical Presentation 1Uploaded byASClabISB
- (2) Types of DataUploaded byASClabISB
- Complete Business Statistics-Chapter 3Uploaded bykrishnadeep_gupta4018

- (7) Discrete Uniform DistributionUploaded byASClabISB
- (15) Chi-square, Student’s t and Snedecor’s F distributionsUploaded byASClabISB
- (14) Joint DistributionUploaded byASClabISB
- (12)Continuous DistributionsUploaded byASClabISB
- (4) Conditional ProbabilityUploaded byASClabISB
- (9) Basic Box-PlotUploaded byASClabISB
- (9) Geometric and Negative Binomial DistributionUploaded byASClabISB
- (8) Measures of DispersionUploaded byASClabISB
- (4) Condensation of DataUploaded byASClabISB
- (8) Binomial DistributionUploaded byASClabISB
- (5) Bayes' RuleUploaded byASClabISB
- (12) Bivariate DataUploaded byASClabISB
- (2) Permutations and CombinationsUploaded byASClabISB
- R TutorialUploaded byASClabISB
- (3) ProbabilityUploaded byASClabISB
- (1) IntroductionUploaded byASClabISB
- (3) Methods of Data CollectionUploaded byASClabISB
- (11) Notched and Variable Width Box-PlotsUploaded byASClabISB
- (10) Box-Plot With FencesUploaded byASClabISB
- (2) Types of DataUploaded byASClabISB
- (8b) Grouped Data_central Tendency and DispersionUploaded byASClabISB
- (6) Graphical Presentation 2Uploaded byASClabISB
- (5) Graphical Presentation 1Uploaded byASClabISB

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