The concept of probability is at the heart of statistics. Probability is an everyday concept and a word, people, use it all the time. But once you really start understanding the core mathematical idea of probability, it blows your mind.
I love to predict things. I love forecasting and understanding the probability of something happening. Maybe that is why I really like risk management because risks are all about working with possibilities.
The idea of probability is brilliant. Probability gives us a number between 0 and 1, where 1 means it’s absolutely certain that it will happen and 0 means that it is absolutely certain that it will not happen. And everything in between gives the notion of the likelihood of something happening, and then as humans, we are able to interpret and connect with this number.
Let’s take one of the most common examples when we explain probability; suppose we are rolling dice. If I ask you the probability of getting a six, you would divide 1/6 and tell me that I would have a 16.7% chance of getting a six. The reason why this seemed straightforward was that we can practically understand how the dice work, and we can visualise the possible outcomes of that task of rolling dice; hence we are able to mathematically calculate the probability of getting a six. Statistically speaking, the reason by we can calculate this probability as 1/6 is by the idea that if we were to roll the dice say 1000 times, then roughly around 166 times of rolling a 6 would fall.
This actually brings us to the concept of probability distributions. This means that finding the probability of a particular event is a mathematical model, and each of these mathematical models can be depicted as a graph. Why? Because a mathematical model is made up of variables, different values of the variables give different outcomes. We can plot this into a graph.
A probability distribution is simply a mathematical model and is generally depicted as a graph for better understanding. In the beginning, I was amazed by probability distributions because a majority of the phenomenon of the world can be explained by a few probability distribution models.
You might have heard this, but people say many things in life follows a normal distribution (which is true). And this normal distribution is one of the most popular probability distributions in mathematics. Thus, what it means is that if we know that a certain phenomenon can be modelled using a normal distribution, we can use that mathematical model to calculate the probability of that event happening.
Suppose you are from a statistics background or interested to learn statistics. In that case, it might be of your interest to understand the mathematics behind this. Still, even if you are only interested in understanding the concept’s idea, I think it is brilliant to learn what probability distributions are and how they impact the understanding of the probability of events.
