Case 1

MORE CARDS, MORE

SPENDING?
Learning Outcomes of Case 1

1. Know the importance of a Joint Probability

Distribution

2. Describe the relationship between two

random variables
The table below shows, for credit card holders with
one to three cards, the joint probabilities for number
of cards owned (X) and number of credit purchases
made in a week (Y).

Number Number of Purchases in Week (Y)

Of Cards (X) 0 1 2 3 4
1 0.08 0.13 0.09 0.06 0.03

2 0.03 0.08 0.08 0.09 0.07

3 0.01 0.03 0.06 0.08 0.08

 Number Number of Purchases in Week (Y)
0 1 2 3 4
Of Cards (X)
1 0.08 0.13 0.09 0.06 0.03
2 0.03 0.08 0.08 0.09 0.07
3 0.01 0.03 0.06 0.08 0.08

What is the mean number of cards

held by a person from this group?

What is the median number of cards

held by a person from this group?
 Number Number of Purchases in Week (Y)
0 1 2 3 4
Of Cards (X)
1 0.08 0.13 0.09 0.06 0.03
2 0.03 0.08 0.08 0.09 0.07
3 0.01 0.03 0.06 0.08 0.08

For a person who has three cards, what is

the probability distribution for number of
purchases made in the week?

Do you think the number of cards held is

a factor that affects a person’s
purchasing behaviour?
 Number Number of Purchases in Week (Y)
0 1 2 3 4
Of Cards (X)
1 0.08 0.13 0.09 0.06 0.03
2 0.03 0.08 0.08 0.09 0.07
3 0.01 0.03 0.06 0.08 0.08

Are number of cards owned and

number of purchases made
statistically independent?
 Number Number of Purchases in Week (Y)
0 1 2 3 4
Of Cards (X)
1 0.08 0.13 0.09 0.06 0.03
2 0.03 0.08 0.08 0.09 0.07
3 0.01 0.03 0.06 0.08 0.08

Calculate the correlation between

number of cards owned and
number of purchases.

Does more number of cards cause

more number of purchases?