Wednesday, 29 December 2010

The Poisson Variation of the Binomial

My recent post about Why the Other Line Moves Faster reminded me of another variation of the binomial distribution that is not covered in AP Statistics, the Poisson Distributions. (Ok, the Poisson is lots more than just a special case of the binomial, more about that later, but in the days before hand-held calculators it was in that sense that we met it.)

The distribution is named for the French Mathematician Simeon Denis Poisson (hey, his name is on the Eiffel Tower.. 2nd from the right on the South East side).

Suppose you had a very rare binomial event, let's say something that happened only one in 200 trials (p=.005) and we wanted to know how probable it was to happen four times (x=4) in three-hundred trials (n=300). The calculation of the binomial probability is now as easy to do with modern calculators as with the Poisson approximation to it, but in my youth a calculation of looked nearly impossible.

The Poisson frequently uses the Greek letter lambda, , for the mean or expected value np. In this case NP=300(.005) = 3/2 indicates that, on average, we would expect only 1.5 successes in 300 trials. We want to calculate the probability of getting four successes. The Poisson probability is given by . The difference between the two calculations is less than .0002 on my Ti-84 calculator.

The Poisson is not limited to binomial events. More often it is applied to events which are distributed randomly across time. The same calculation above could be used to calculate the probability of four people entering a bank in a 15 minute period when only and average of 1.5 visitors would be expected. If a manufacturing process produces an average of 1.5 failures per day and you wanted to calculate the probability of four failures, you use the same calculation again.

And if you wanted to know how many cashiers to keep open at the market, how many mutations in a string of DNA exposed to radiation, the number of deaths from a rare side effect of a drug, or other similar situations which involve a very rare event with a very large number of possible incidences, the Poisson will often suffice as long as conditions of independence are met.

The Poisson distribution is sometimes called the Law of Small Numbers after a book by the same name by Ladislaus Bortkiewicz published in 1898 on the Poisson distribution.

For AP Statistics Students, it is often possible to approximate the Poisson with the Normal Distribution as long as the value of lambda is about ten or more. For the Poisson, the mean and variance are both the same, so if you approximate it with a normal, use a mean of lambda, and a standard deviation that is the square root of lambda. Do remember to do the continuity correction for the fact that the Poisson is discrete and the Normal is continuous.
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