Probability Concepts to Know for Foundations of Data Science

Understanding probability is key in data science. It helps us make sense of uncertainty, model random events, and draw conclusions from data. Concepts like conditional probability and Bayes' theorem guide decision-making and statistical inference, shaping our analysis.

1. Probability axioms and basic rules

   • The three fundamental axioms: non-negativity, normalization, and additivity.
   • The probability of an event ranges from 0 to 1.
   • The sum of probabilities of all possible outcomes equals 1.

2. Conditional probability

   • The probability of an event given that another event has occurred.
   • Calculated using the formula: P(A|B) = P(A ∩ B) / P(B).
   • Important for understanding dependencies between events.

3. Bayes' theorem

   • A method for updating probabilities based on new evidence.
   • Formula: P(A|B) = [P(B|A) * P(A)] / P(B).
   • Essential for decision-making in uncertain conditions.

4. Random variables (discrete and continuous)

   • A random variable is a numerical outcome of a random process.
   • Discrete random variables take on countable values; continuous can take any value within a range.
   • Key for modeling and analyzing data.

5. Probability distributions (e.g., Bernoulli, Binomial, Poisson, Normal)

   • Describes how probabilities are distributed over values.
   • Bernoulli: single trial with two outcomes; Binomial: multiple trials.
   • Poisson: counts of events in a fixed interval; Normal: continuous data with a bell-shaped curve.

6. Expected value and variance

   • Expected value: the long-term average of random variables.
   • Variance: measures the spread of a distribution around the expected value.
   • Both are crucial for understanding the behavior of random variables.

7. Law of large numbers

   • States that as the number of trials increases, the sample mean will converge to the expected value.
   • Justifies the use of sample statistics to estimate population parameters.
   • Fundamental for statistical inference.

8. Central limit theorem

   • As sample size increases, the distribution of the sample mean approaches a normal distribution, regardless of the original distribution.
   • Key for making inferences about population means.
   • Underpins many statistical methods.

9. Joint, marginal, and conditional distributions

   • Joint distribution: probability distribution of two or more random variables.
   • Marginal distribution: probability distribution of a subset of variables.
   • Conditional distribution: probability distribution of one variable given another.

10. Independence and correlation

    • Independence: two events are independent if the occurrence of one does not affect the other.
    • Correlation measures the strength and direction of a linear relationship between two variables.
    • Important for understanding relationships in data.

11. Probability sampling methods

    • Techniques for selecting a sample from a population to ensure representativeness.
    • Common methods include simple random sampling, stratified sampling, and cluster sampling.
    • Essential for valid statistical inference.

12. Hypothesis testing

    • A method for making decisions about population parameters based on sample data.
    • Involves formulating a null hypothesis and an alternative hypothesis.
    • Uses p-values to determine statistical significance.

13. Confidence intervals

    • A range of values used to estimate a population parameter with a specified level of confidence.
    • Provides a measure of uncertainty around the estimate.
    • Widely used in reporting results of statistical analyses.

14. Maximum likelihood estimation

    • A method for estimating the parameters of a statistical model.
    • Finds the parameter values that maximize the likelihood of the observed data.
    • Fundamental for many statistical models and methods.

15. Bayesian inference

    • A statistical method that incorporates prior knowledge or beliefs into the analysis.
    • Updates beliefs based on new evidence using Bayes' theorem.
    • Provides a flexible framework for statistical modeling and decision-making.