ESSENTIAL STATISTICS 2E

William Navidi and Barry Monk

McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
 Random Variables

Section 5.1

McGraw-Hill Education.
 Objectives
1. Distinguish between discrete and continuous random
variables
2. Determine a probability distribution for a discrete random
variable
3. Describe the connection between probability distributions
and populations
4. Construct a probability histogram for a discrete random
variable
5. Compute the mean of a discrete random variable
6. Compute the variance and standard deviation of a discrete
random variable

McGraw-Hill Education.
 Objective 1
Distinguish between discrete and continuous
random variables

McGraw-Hill Education.
 Random Variable
If we roll a fair die, the possible outcomes are the numbers 1, 2, 3, 4,
5, and 6, and each of these numbers has probability 1/6. Rolling a
die is a probability experiment whose outcomes are numbers. The
outcome of such an experiment is called a random variable.

A random variable is a numerical outcome of a probability

experiment.

McGraw-Hill Education.
 Discrete and Continuous Random Variables
Discrete random variables are random variables whose
possible values can be listed. Examples include:
The number that comes up on the roll of a die.
The number of siblings a randomly chosen person
has.

Continuous random variables are random variables that

can take on any value in an interval. Examples include:
The height of a randomly chosen college student.
The amount of electricity used to light a randomly
chosen classroom.

McGraw-Hill Education.
 Objective 2
Determine a probability distribution for a
discrete random variable

McGraw-Hill Education.
 Probability Distribution
A probability distribution for a discrete random variable
specifies the probability for each possible value of the
random variable.

Properties:
0 1 for every possible
= 1

McGraw-Hill Education.
 Example 1: Probability Distribution
Decide if the following represents a probability distribution.

x P(x)
1 0.25
2 0.65
3 0.30
4 0.11

This is not a probability distribution. (3) is not between 0 and 1.

McGraw-Hill Education.
 Example 2: Probability Distribution
Decide if the following represents a probability distribution.

x P(x)
1 0.17
0.5 0.25
0 0.31
0.5 0.22
1 0.05

This is a probability distribution. All the probabilities are between 0

and 1, and they add up to 1.

McGraw-Hill Education.
 Example 3: Probability Distribution
Decide if the following represents a probability distribution.

x P(x)
1 1.02
10 0.31
100 0.90
1000 0.43

This is not a probability distribution. (1) is not between 0 and 1.

McGraw-Hill Education.
 Example: Computing Probabilities (Part a)
Four patients have made appointments to have x P(x)
their blood pressure checked at a clinic. Let be 0 0.23
the number of them that have high blood
1 0.41
pressure. The probability distribution of is as
follows. 2 0.27
3 0.08
a) Find (2 or 3) 4 0.01
Solution:
The events 2 and 3 are mutually exclusive, since they cannot
both happen. We use the Addition Rule for Mutually Exclusive
events:
(2 or 3) = (2) + (3) = 0.27 + 0.08 = 0.35

McGraw-Hill Education.
 Example: Computing Probabilities (Part b)
Four patients have made appointments to have x P(x)
their blood pressure checked at a clinic. Let be 0 0.23
the number of them that have high blood
1 0.41
pressure. The probability distribution of is as
follows. 2 0.27
3 0.08
b) Find (More than 1) 4 0.01
Solution:
More than 1 means 2 or 3 or 4. We use the Addition Rule for
Mutually Exclusive events:
(More than 1) = (2 or 3 or 4) = 0.27 + 0.08 + 0.01 = 0.36

McGraw-Hill Education.
 Example: Computing Probabilities (Part c)
Four patients have made appointments to have x P(x)
their blood pressure checked at a clinic. Let be 0 0.23
the number of them that have high blood
1 0.41
pressure. The probability distribution of is as
follows. 2 0.27
3 0.08
c) Find (At least 1) 4 0.01
Solution:
We use the Rule of Complements:
(At least one) = 1 (0) = 1 0.23 = 0.77

McGraw-Hill Education.
 Objective 3
Describe the connection between probability
distributions and populations

McGraw-Hill Education.
 Probability Distributions and Populations
Statisticians are interested in studying samples drawn from
populations. Random variables are important because when
an item is drawn from a population, the value observed is
the value of a random variable.

The probability distribution of the random variable tells how

frequently we can expect each of the possible values of the
random variable to turn up in the sample.

McGraw-Hill Education.
 Example: Connection with Populations
An airport parking facility contains 1000 parking spaces. Of these,
142 are covered long-term spaces that cost $2.00 per hour, 378 are
covered short-term spaces that cost $4.50 per hour, 423 are
uncovered long-term spaces that cost $1.50 per hour, and 57 are
uncovered short-term spaces that cost $4.00 per hour. A parking
space is selected at random. Let represent the hourly parking fee
for the randomly sampled space. Find the probability distribution of
.

Solution:
To find the probability distribution, we must list the possible values
of and then find the probability of each of them. The possible
values of are 1.50, 2.00, 4.00, 4.50. Next, we find their
probabilities.
McGraw-Hill Education.
 Example: Connection with Populations (Continued)
An airport parking facility contains 1000 parking spaces. Of these, 142 are
covered long-term spaces that cost $2.00 per hour, 378 are covered short-
term spaces that cost $4.50 per hour, 423 are uncovered long-term spaces
that cost $1.50 per hour, and 57 are uncovered short-term spaces that cost
$4.00 per hour.
# of spaces costing $1.50 423
1.50 = = = 0.423
total # of spaces 1000 x P(x)
# of spaces costing $2.00 142
2.00 = = = 0.142 1.50 0.423
total #of spaces 1000
# of spaces costing $4.00 57 2.00 0.142
4.00 = = = 0.057 4.00 0.057
total # of spaces 1000
# of spaces costing $4.50 378 4.50 0.378
4.50 = = = 0.378
total # of spaces 1000

McGraw-Hill Education.
 Objective 4
Construct a probability histogram for a discrete
random variable

McGraw-Hill Education.
 Probability Histograms
Probability distributions can be represented with histograms to
visualize the distribution.
Example:
The following presents the probability distribution and histogram for
the number of boys in a family of five children, using the assumption
that boys and girls are equally likely and that births are independent
events.
x P(x)
0 0.03125
1 0.15625
2 0.31250
3 0.31250
4 0.15625
5 0.03125
McGraw-Hill Education.
 Objective 5
Compute the mean of a discrete random
variable

McGraw-Hill Education.
 Mean of a Random Variable
Recall that the mean is a measure of center. The mean of a
random variable provides a measure of center for the
probability distribution of a random variable.

To find the mean of a discrete random variable, multiply

each possible value by its probability, then add the
products:

= [ ]

McGraw-Hill Education.
 Example: Mean of a Random Variable
A computer monitor is composed of a very large number x P(x)
of points of light called pixels. It is not uncommon for a 0 0.2
few of these pixels to be defective. Let represent the
1 0.5
number of defective pixels on a randomly chosen
monitor. The probability distribution of is as follows. 2 0.2
Find the mean number of defective pixels. 3 0.1

The mean is = 0 0.2 + 1 0.5 + 2 0.2 + 3 0.1 = 1.2

If we imagine each rectangle in the

probability histogram to be a weight,
the mean is the point at which the
histogram would balance.

McGraw-Hill Education.
 Expected Value
There are many occasions on which people want to
predict how much they are likely to gain or lose if they
make a certain decision or take a certain action. Often,
this is done by computing the mean of a random variable.

In such situations, the mean is sometimes called the

expected value and is denoted by (). If the expected
value is positive, it is an expected gain, and if it is negative,
it is an expected loss.
E ( X ) x p( x)
all x

McGraw-Hill Education.
 Example: Expected Value
A mineral economist estimated that a particular venture had probability
0.4 of a $30 million loss, probability 0.5 of a $20 million profit, and
probability 0.1 of a $40 million profit. Let represent the profit. Find the
probability distribution of the profit and the expected value of the profit.
Does this venture represent an expected gain or an expected loss?

Solution: x P(x)
The probability distribution is as follows.
30 0.4
Note that 30 is negative since it represents a loss.
20 0.5
40 0.1
The expected value is
() = (30)(0.4) + (20)(0.5) + (40)(0.1) = 2.0

There is an expected gain of $2 million.

McGraw-Hill Education.
 Objective 6
Compute the variance and standard deviation
of a discrete random variable

McGraw-Hill Education.
 Variance/Standard Deviation of a Random Variable
The variance and standard deviation provide a measure of
spread for the probability distribution of a random variable.

The variance of a discrete random variable is given by

=
or, equivalently (and easier to compute by hand)
=
2 = 2 2
The standard deviation of a discrete random variable is
the square root of the variance:
=
McGraw-Hill Education.
 Mean/Standard Deviation on the TI-84 PLUS
The mean and standard deviation of a random
variable can be found on the TI-84 PLUS
Calculator with the following steps:

Step 1: Enter the values of the random

variable into L1 and the associated
probabilities in L2.

Step 2: Press STAT and highlight the CALC

menu and select 1-Var Stats with L1
and L2 as the arguments.

McGraw-Hill Education.
 Example: Mean/Standard Dev. on the TI-84
Compute the mean and standard deviation using the x P(x)
TI-84 PLUS.
0 0.2
Solution: 1 0.5
We first enter values of the random variable 2 0.2
and the associated probabilities into the
3 0.1
data editor.

We run the 1-Var Stats L1, L2 command to

find that = 1.2 and = 0.872.

McGraw-Hill Education.
 You Should Know . . .
The difference between discrete and continuous random
variables
How to determine the probability distribution for a
discrete random variable
How to construct a probability distribution for a
population
How to construct a probability histogram
How to compute the mean, variance, and standard
deviation of a discrete random variable

McGraw-Hill Education.