Conditional Probability: Formula and Real-Life Examples

What Is Conditional Probability?

Conditional probability is defined as the likelihood of an event or

outcome occurring, based on the occurrence of a previous event or
outcome. Conditional probability is calculated by multiplying
the probability of the preceding event by the updated probability of
the succeeding, or conditional, event.

Conditional probability can be contrasted with unconditional

probability. Unconditional probability refers to the likelihood that an
event will take place irrespective of whether any other events have
taken place or any other conditions are present.

KEY TAKEAWAYS

 Conditional probability refers to the chances that some

outcome occurs given that another event has also occurred.
 It is often stated as the probability of B given A and is written
as P(B|A), where the probability of B depends on that of A
happening.
 Conditional probability can be contrasted with unconditional
probability.
 Probabilities are classified as either conditional, marginal, or
joint.
 Bayes' theorem is a mathematical formula used in calculating
conditional probability.

Understanding Conditional Probability

Conditional probabilities are contingent on a previous result or

event occurring. A conditional probability would look at such events
in relationship with one another. Conditional probability is thus the
likelihood of an event or outcome occurring based on the
occurrence of some other event or prior outcome.

Two events are said to be independent if one event occurring does

not affect the probability that the other event will occur. However, if
one event occurring or not does, in fact, affect the probability that
the other event will occur, the two events are said to be dependent.
If events are independent, then the probability of some event B is
not contingent on what happens with event A. A conditional
probability, therefore, relates to those events that are dependent
on one another.

Conditional probability is often portrayed as the "probability of

A given B," notated as P(A|B).
Conditional probability is used in a variety of fields, such
as insurance, economics, politics, and many different fields of
mathematics.

Conditional Probability Formula

P(B|A) = P(A and B) / P(A)

Or:

P(B|A) = P(A∩B) / P(A)

Where
P = Probability
A = Event A
B = Event B

Unconditional probability is also known as marginal probability and

measures the chance of an occurrence ignoring any knowledge
gained from previous or external events. Since this probability
ignores new information, it remains constant.

Examples of Conditional Probability

As an example, suppose you are drawing three marbles—red, blue,

and green—from a bag. Each marble has an equal chance of being
drawn. What is the conditional probability of drawing the red
marble after already drawing the blue one?

First, the probability of drawing a blue marble is about 33%

because it is one possible outcome out of three. Assuming this first
event occurs, there will be two marbles remaining, with each
having a 50% chance of being drawn. So the chance of drawing a
blue marble after already drawing a red marble would be about
16.5% (33% x 50%).

As another example to provide further insight into this concept,

consider that a fair die has been rolled and you are asked to give
the probability that it was a five. There are six equally likely
outcomes, so your answer is 1/6.

But imagine if before you answer, you get extra information that
the number rolled was odd. Since there are only three odd numbers
that are possible, one of which is five, you would certainly revise
your estimate for the likelihood that a five was rolled from 1/6 to
1/3.

This revised probability that an event A has occurred, considering

the additional information that another event B has definitely
occurred on this trial of the experiment, is called the conditional
probability of A given B and is denoted by P(A|B).

Another Example of Conditional Probability

As another example, suppose a student is applying for admission to

a university and hopes to receive an academic scholarship. The
school to which they are applying accepts 100 of every 1,000
applicants (10%) and awards academic scholarships to 10 of every
500 students who are accepted (2%).

Of the scholarship recipients, 50% of them also receive university

stipends for books, meals, and housing. For the students, the
chance of them being accepted and then receiving a scholarship
is .2% (.1 x .02). The chance of them being accepted, receiving the
scholarship, then also receiving a stipend for books, etc. is .1% (.1 x
.02 x .5).

Conditional Probability vs. Joint Probability and Marginal

Probability

 Conditional probability: p(A|B) is the probability of event A

occurring, given that event B occurs. For example, given
that you drew a red card, what’s the probability that it’s a
four (p(four|red))=2/26=1/13. So out of the 26 red cards
(given a red card), there are two fours so 2/26=1/13.
 Marginal probability: the probability of an event occurring
(p(A)) in isolation. It may be thought of as an unconditional
probability. It is not conditioned on another
event. Example: the probability that a card drawn is red
(p(red) = 0.5). Another example: the probability that a card
drawn is a 4 (p(four)=1/13).
 Joint probability: p(A ∩B). Joint probability is that of event
A and event B occurring. It is the probability of the
intersection of two or more events. The probability of the
intersection of A and B may be written p(A ∩ B). Example: the
probability that a card is a four and red =p(four and red) =
2/52=1/26. (There are two red fours in a deck of 52, the 4 of
hearts and the 4 of diamonds).

Bayes' Theorem and Conditional Probability

Bayes' theorem, named after 18th-century British mathematician

Thomas Bayes, is a mathematical formula for determining
conditional probability.1 The theorem provides a way to revise
existing predictions or theories (update probabilities) given new or
additional evidence. In finance, Bayes' theorem can be used to rate
the risk of lending money to potential borrowers.
Bayes' theorem is also called Bayes' Rule or Bayes' Law and is the
foundation of the field of Bayesian statistics. This set of rules of
probability allows one to update their predictions of events
occurring based on new information that has been received, making
for better and more dynamic estimates.

Bayes' theorem is well suited to and widely used in machine

learning.

How Do You Calculate Conditional Probability?

Conditional probability is calculated by multiplying the probability of

the preceding event by the probability of the succeeding or
conditional event. Conditional probability looks at the probability of
one event happening based on the probability of a preceding event
happening.

What Is the Difference Between Probability and Conditional

Probability?

Probability looks at the likelihood of one event occurring.

Conditional probability looks at two events occurring in relation to
one another. It looks at the probability of a second event occurring
based on the probability of the first event occurring.

What Is Prior Probability?

Prior probability is the probability of an event occurring before any

data has been gathered to determine the probability. It is the
probability as determined by a prior belief. Prior probability is a
component of Bayesian statistical inference.

What Is Compound Probability?

Compound probability looks to determine the likelihood of two

independent events occurring. Compound probability multiplies the
probability of the first event by the probability of the second event.
The most common example is that of a coin flipped twice and the
determination if the second result will be the same or different than
the first.

The Bottom Line

Conditional probability examines the likelihood of an event

occurring based on the likelihood of a preceding event occurring.
The second event is dependent on the first event. It is calculated by
multiplying the probability of the first event by the probability of
the second event.