How probability works in real life
What is probability? -
Probability is a term used in mathematics to describe the likelihood of something happening.
How is probability calculated? -
Probability is calculated in terms of percentages and fractions. Here are a few examples of how these are calculated and described.
It’s certain -
This is when there is a 100% probability of something happening. It’s the highest possible likelihood.
It’s likely -
When it’s “likely” that something will happen, this means that there is a 50% to 100% probability of it happening.
There’s an even chance -
This one is used to describe the exact middle. Meaning that there is a 50% chance of it happening or not happening.
It’s impossible -
Opposite to the “it’s certain,” this is when there is zero likelihood of something happening.
Types of probability -
Now that we’ve looked at how probability is calculated, it’s also important to understand the types of probability and what they mean.
Experimental probability -
This is calculated using the number of total possible outcomes by the total possible number of trials. E.g. heads or tails.
Subjective probability -
Subjective probability is based upon subjective elements such as feelings or emotions. E.g. betting on a sports team just because it’s a person’s favorite team.
Probability in real life -
Now, let's take a look at how these concepts apply in real life.
Weather forecast - For instance, if there is a 65% chance of rain, you are more likely to take an umbrella with you.
Sports outcomes -
Many coaches decide on the strategy and tactics for games based on probability.
Autocorrect software -
This is one most of us experience daily. Word suggestions as we type on our smartphones are calculated based on probability.
Games of chance -
A good example would be a card game. Probability (as well as statistics) play a role in how the game will develop and what are the chances of winning it.
Shopping suggestions use probability to target consumers with products they are more likely to buy.
Election results - Then exit polls and trends are added into the mix and a winning/loss probability is calculated.
Stock market -
The stock market relies on a number of analytics to calculate the probability of stocks going up or down in price.
Sales forecasting -
Companies predict future sales based on probability, and this is how they ensure they have enough stock.