OpenSAP Data Science W4

Week 4: Introduction to Probability
Unit 1: Introduction to Probability

Introduction to Probability
Introduction
▪ There are many times in modern life where

you would like to predict the likely outcome of
an event or series of events.
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Introduction – More complex examples
event/s
probability =
number of
outcomes

Some symbols
Here are some commonly used symbols and

conventions:
▪ P(A) – The probability of event A
− The probability of throwing a six with a die – P(6)
▪ P(A ∩ B) – The probability of event A and B
− The probability of throwing 2 sixes – P(6∩6)
▪ P(A ∪ B) – The probability of event A or event B
− The probability of choosing one card from a standard
deck and getting either a Queen of Hearts or King of
Hearts
▪ P(A|B) – The probability of A given prior event B
− The probability of being diagnosed with cancer given
that the patient is a smoker

What is probability?
0 0.25 0.5 0.75 1
Will Not Unlikely May or Likely Will

happen may not happen
happen

How do I calculate the probability of an event?
Calculate all possible outcomes for an event

(the “sample space”).
▪ For example, there are 6 possible events
(outcomes) when throwing one die:
▪ S = {1,2,3,4,5,6}

▪ To calculate the probability of an event you use the

following formula:
𝑇𝑜𝑡𝑎𝑙 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑂𝑢𝑡𝑐𝑜𝑚𝑒𝑠 𝑓𝑜𝑟 𝑡ℎ𝑒 𝐸𝑣𝑒𝑛𝑡
𝑃(𝐸) =
𝑇𝑜𝑡𝑎𝑙 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑂𝑢𝑡𝑐𝑜𝑚𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑆𝑎𝑚𝑝𝑙𝑒 𝑆𝑝𝑎𝑐𝑒
▪ What is the probability of throwing a six?

– P(E) = 1/6 = 0.16 or 16%
▪ What is the probability of throwing an even number?
– P(E) = 3/6 = 0.5 or 50%

Music style # of people who prefer

Rock 20
Disco 10
Hip Hop 15
Reggae 25
Classical 30
Total 100
If you choose a random person, what is the likelihood that they like classical music?
P(E) = Frequency for classical / Total frequencies in table
P(E) = 30/100 = 0.3

Summary
▪ You can calculate the likelihood of an event or series

of events using probability.
▪ You need to understand all possible outcomes in the
“sample space” and the particular event or group of
events you are analyzing.

Thank you.
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Unit 2: Conditional Probability
Conditional Probability
Introduction
▪ It often happens that the probability of an event is

conditional on a previous event.
▪ If you have a bag of snooker balls, you can calculate
the probability that you will pull out a red one or a
green one.
▪ However, what is the probability that you will pull out
a second red or a second green?

What is conditional probability?
▪ “Conditional probability” is a measure of the probability

of an event given that another event has occurred.
▪ There are 15 red balls out of a total of 22 balls.
– Therefore, the probability P(E) of taking out a red ball is:
P(E) = 15/22 = 0.68
▪ However, now you have reduced the number of red balls
to 14.
– Therefore, the probability of the next random ball being
red is slightly less:
P(E) = 14/21 = 0.66

Combining probabilities
▪ The upright symbol | is used to indicate conditional

probability.
▪ For example:
– P(B|A) means the conditional probability of B given A.
▪ This is calculated in the following way:
– P(B and A) = P(A) * P(B|A)
▪ So the probability of getting 2 red balls is:
– P(B and A) = 15/22 * 14/21 = 210/462 = 0.4

Pulling 2 aces
▪ What is the probability of pulling an ace from a pack of cards having

already picked out an ace?
▪ There are 52 cards in a standard pack of cards and 4 are aces.
Therefore the simple probability of picking out the first ace is 4/52:
– P(A) = 4/52 = 1/13 or 7.7%
▪ Once this ace has been picked out there are only 3 other aces left and
51 cards in total. Therefore the simple probability of drawing the
second ace is 3/51:
– P(B|A) = 3/51 = 5.9%
▪ However we want to combine these to calculate the combined
probability of pulling two aces – P(A and B) This can be done by
multiplying together the above simple probabilities:
– P(A and B) = P(A) * P(B|A) = 4/52 * 3/51 = 12/2652 = 1/221 or 0.45%

Desserts
P(B|A) = P(A ∩ B)
P(A)
▪ 80% of your team like Tiramisu.

▪ 20% like Tiramisu and Sticky Toffee Pudding.
▪ What is the probability of team members liking Sticky
Toffee pudding given that they like Tiramisu?
P(STP|T) = P(T ∩ STP) = 0.2 = 0.25 or 25%

P(T) 0.8

Summary
▪ Using probability you can calculate the likelihood of an

event or series of events.
▪ You need to understand all possible outcomes in the
sample space and the particular event or group of events
you are analysing.
▪ Events which are conditional upon each other can be
combined to calculate probabilities.
▪ By rearranging the formula, you can calculate the
probability of more than one dependent event, P(A and B),
as well as the probability of one event being contingent on
a second event, P(B|A).

Thank you.
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Unit 3: Understanding Bayes’ Theorem
Understanding Bayes’ Theorem
Introduction
▪ In the 18th century, Thomas Bayes came up

with an approach to how statistical probabilities
should change in response to new evidence.
▪ Bayes’ theorem provides us with the ability to
update our beliefs based on prior knowledge of
factors that might be related to the event.
▪ In this lesson, you should remember that
P(A|B) means the probability of outcome ‘A’
given evidence ‘B’.
− For example, the probability of getting lung
cancer, given that the person is a smoker:
P(Lung Cancer | Smoker)

Where can we use Bayes’ theorem?
What is the likelihood that a You have developed an app to review What is the likelihood of
CEO of a stock market listed travel expense claims, after an audit people who work
company will be fired, given found that 3% of them contain errors. outdoors without a hat
that the company’s share ▪ The app finds errors in 94% of the examples getting skin cancer, given
price underperforms its picked up in the audit and in 8% of the they work in the UK?
competitors’ by more than claims with no errors.
10% over a year? ▪ What is the likelihood of there actually being
an error, given the expense claim has been
marked as such by your app?
Medical test example
▪ We know that a certain % of the population will get

lung cancer, but we want to know how that is affected
by prior conditions like drinking, smoking, or lack of
exercise.
▪ Bayes’ theorem allows us to calculate the likelihood
(probability) of someone getting cancer given that
they smoke.

Bayes’ theorem – The formula
P(A|B) = P(B|A) P(A)

P(B)
▪ P(A|B) is the probability of event A (such as ‘cancer’)

given B (if we know the person is a smoker).
▪ P(B|A) is the probability of B given A.
▪ Therefore, the formula calculates the probability of
event A, given the prior information we have about
event B.

What’s the probability of getting cancer from smoking?
Lets assume that the prior probabilities are:

▪ 4% of the population have some form of cancer
▪ 20% of the population smoke
▪ 60% of people with cancer smoke,
i.e. P(Smoker|Cancer)


P(B)
▪ The probability of the evidence conditional on the hypothesis –

probability of being a smoker given you have cancer:
P(B|A) = 0.6
▪ The prior probability of the hypothesis – having cancer:
P(A) = 0.04
▪ The prior probability of the evidence – simple prior probability
of being a smoker:
P(B) = 0.2

We will use S for smoker and C for cancer:
P(C|S) = P(S|C) x P(C) = (0.6 x 0.04) = 0.12 (12%)

P(S) 0.2

Summary
▪ You can use Bayes’ theorem to allow probabilities to be

re-evaluated based on new evidence.
▪ Bayes’ theorem allows you to evaluate the likelihood of
an event based on the occurrence of a prior event.
▪ The formula for Bayes’ theorem:
VENN DIAGRAM!
P(B) A B
Both A & B
▪ The probability of A occurring is calculated based on

the relevant event B, which has occurred.

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Unit 4: Examples of Bayes’ Theorem in Practice
Examples of Bayes’ Theorem in Practice
Reminder
▪ Let’s remind ourselves of the formula:

P(B)
▪ That is … what is the likelihood of event A Event A Event B

given the evidence we have of B.

Example 1 – Watching the weather!
▪ You look out of the window and see clouds

everywhere. How do you calculate the likelihood that
this will turn into rain later?
That is P(R|C)
▪ You know from old weather data that rainy days start
off cloudy 70% of the time:
That is P(C|R) = 0.7
– This is the simple probability of the day having
started cloudy earlier, given rain later in the day.
▪ Yet, 50% of days start off cloudy:
That is P(C) = 0.5
▪ This month (June) normally only has a few cloudy days
(3 days in the month, i.e. 10%):
That is P(R) = 0.1
▪ What is the likelihood of rain?
Example 1 – Watching the weather!

P(B)
P(Rain|Cloud) = P(Cloud|Rain) P(Rain)

P(Cloud)
▪ We know:
P(Cloud|Rain) = 0.7
P(Rain) = 0.1 (likelihood for June)
P(Cloud) = 0.5
▪ Therefore, using Bayes’ theorem, the probability of getting
rain if it’s cloudy in June is …
P(Rain|Cloud) = 0.7 x 0.1 = 0.14 or 14%
0.5
Summary
▪ Calculating probabilities is very useful, but it is

important to be able to factor in information that will
relate to and affect the probability.
▪ Bayes’ theorem allows you to evaluate the likelihood of
an event based on the occurrence of a prior event.
▪ This was illustrated with two very simple examples.
However, Bayes’ theorem can be used in much more
interesting and complex ways, such as calculating the
likelihood of false positives on a health screening test.

Thank you.
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Week 4: Introduction to Probability

Unit 1: Introduction to Probability

▪ There are many times in modern life where

© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 2

© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 3

Here are some commonly used symbols and

© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 4

0 0.25 0.5 0.75 1

Will Not Unlikely May or Likely Will

© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 5

Calculate all possible outcomes for an event

© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 6

▪ To calculate the probability of an event you use the

▪ What is the probability of throwing a six?

© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 7

Music style # of people who prefer

© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 8

▪ You can calculate the likelihood of an event or series

© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 9

© 2019 SAP SE or an SAP affiliate company. All rights reserved.

▪ It often happens that the probability of an event is

© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 2

▪ “Conditional probability” is a measure of the probability

© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 3

▪ The upright symbol | is used to indicate conditional

© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 4

▪ What is the probability of pulling an ace from a pack of cards having

© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 5

▪ 80% of your team like Tiramisu.

P(STP|T) = P(T ∩ STP) = 0.2 = 0.25 or 25%

© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 6

▪ Using probability you can calculate the likelihood of an

© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 7

© 2019 SAP SE or an SAP affiliate company. All rights reserved.

▪ In the 18th century, Thomas Bayes came up

P(Lung Cancer | Smoker)

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▪ We know that a certain % of the population will get

© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 4

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

▪ P(A|B) is the probability of event A (such as ‘cancer’)

© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 5

Lets assume that the prior probabilities are:

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

▪ The probability of the evidence conditional on the hypothesis –

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We will use S for smoker and C for cancer:

P(C|S) = P(S|C) x P(C) = (0.6 x 0.04) = 0.12 (12%)

© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 8

▪ You can use Bayes’ theorem to allow probabilities to be

▪ The probability of A occurring is calculated based on

© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 9

© 2019 SAP SE or an SAP affiliate company. All rights reserved.

▪ Let’s remind ourselves of the formula:

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

▪ That is … what is the likelihood of event A Event A Event B

© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 2

▪ You look out of the window and see clouds

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

P(Rain|Cloud) = P(Cloud|Rain) P(Rain)

▪ Calculating probabilities is very useful, but it is

© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 5

© 2019 SAP SE or an SAP affiliate company. All rights reserved.