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8.1 Probability Density Functions

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8.1 Probability Density Functions

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Job Polvoriza
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5/15/2020 Print Preview

Chapter 8: Continuous Probability Distributions: 8-1 Probability Density Functions


Book Title: Statistics for Management and Economics
Printed By: JOB POLVORIZA ([email protected])
© 2018 Cengage Learning, Cengage Learning

8-1 Probability Density Functions


A continuous random variable is one that can assume an uncountable number of values.
Because this type of random variable is so different from a discrete variable, we need to
treat it completely differently. First, we cannot list the possible values because there is an
infinite number of them. Second, because there is an infinite number of values, the
probability of each individual value is virtually 0. Consequently, we can determine the
probability of only a range of values. To illustrate how this is done, consider the histogram
we created for the ages of ACBL members (Example 3.1), which is depicted in Figure 8.1.

Figure 8.1
Histogram for Example 3.1

We found, for example, that the relative frequency of the interval 10–20 was 6/200. Using
the relative frequency approach, we estimate that the probability that a randomly selected
ACBL member will be between 10 and 20 years of age is . We can similarly
estimate the probabilities of the other intervals in the histogram.

Interval Relative Frequency

10 ≤ X ≤ 20 6/200

20 < X ≤ 30 27/200

30 < X ≤ 40 30/200

40 < X ≤ 50 16/200

50 < X ≤ 60 40/200

60 < X ≤ 70 36/200

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Interval Relative Frequency

70 < X ≤ 80 27/200

80 < X ≤ 90 12/200

90 < X ≤ 100 6/200

   Total

Notice that the sum of the probabilities equals 1. To proceed, we set the values along the
vertical axis so that the area in all the rectangles together adds to 1. We accomplish this by
dividing each relative frequency by the width of the interval, which is 10. The result is a
rectangle over each interval whose area equals the probability that the random variable will
fall into that interval.

To determine probabilities of ranges other than the ones created when we drew the
histogram, we apply the same approach. For example, the probability that an ACBL member
is between 25 and 45 years of age is equal to the area between 25 and 45 as shown in
Figure 8.2.

Figure 8.2
Estimated Probability that an ACBL Member Will be Between 25 and 45

The areas in each shaded rectangle are calculated and added together as follows:

Interval Height of Rectangle Base Multiplied by Height

25 < X ≤ 30

30 < X ≤ 40

40 < X ≤ 45

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We estimate that the probability that a randomly selected ACBL member will be between 25
and 45 years of age is .2575.

If the histogram is drawn with a large number of small intervals, we can smooth the edges of
the rectangles to produce a smooth curve as shown in Figure 8.3. In many cases, it is
possible to determine a function f(x) that approximates the curve. The function is called a
probability density function (a function f(x) such that 1) f(x) is non-negative 2) the total
area under f(x) is 1 3) the area under f(x) between the lines and gives the
probability that the value of x is between a and b) . Its requirements are stated in the
following box.

Figure 8.3
Density Function for Example 3.1

Requirements for a Probability Density Function

The following requirements apply to a probability density function f(x) whose range
is a ≤ x ≤ b.

1. f(x) ≤ 0 for all x between a and b.

2. The total area under the curve between a and b is 1.0.

Integral calculus can often be used to calculate the area under a curve. Fortunately, the
probabilities corresponding to continuous probability distributions that we deal with do not
require this mathematical tool. The distributions will be either simple or too complex for
calculus. Let’s start with the simplest continuous distribution.

Chapter 8: Continuous Probability Distributions: 8-1 Probability Density Functions


Book Title: Statistics for Management and Economics
Printed By: JOB POLVORIZA ([email protected])
© 2018 Cengage Learning, Cengage Learning

© 2020 Cengage Learning Inc. All rights reserved. No part of this work may by reproduced or used in any form or by any means -
graphic, electronic, or mechanical, or in any other manner - without the written permission of the copyright holder.

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