INTRODUCTION:

DEFINITION OF PROBABILITY

Say an experiment is conducted N times, with the

outcome of any trial being unaffected by the
outcome of any other. On each occasion it is noted
whether a certain event A happens, and the total
number of times A occurred kept count of. Then
the probability of the event A is defined as:

This is known as the "historical" definition of

probability (note that several other definitions are
possible). The numerical value of any probability
lies between zero (it never happens) and one (it
always happens).

The box contains two circles (marked A and B,

representing two events), and four numbered
areas.
The probability of A is Pr(A), the total
area inside circle A, equal to area 1
plus area 2.

The probability of B is Pr(B), the total

area inside circle B, equal to area 3
plus area 2.

The probability Pr(A and B) is the area

in both A and B, i.e. area 2.

The probability Pr(A or B) is the area

which appears in circle A, or circle B,
or both, and so equals areas 1 plus 2
plus 3.

Area 4 is everything outside the two

circles, and so represents the
probability Pr(not (A or B)).

The total area in the box represents

everything which can happen, and is
called the sample space.

Definition of
Probability

ADDING
PROBABILITIES

Probabilities may be
added according to the
following rule:

Pr(A or B)= Pr(A) + Pr (B) - Pr (A and B)

If there is no overlap
between the the events,
i.e. Pr(A and B) = 0,
then the events are said
to be mutually exclusive.
Also, we have Pr(not A)
= 1 - Pr(A).

CONDITIONAL
PROBABILITY

The way in which

probabilities of events
combine may be
written as:

Pr (A and B) = Pr (A given B) Pr (B)

Pr (A and B) = Pr (B given A) Pr (A)

If Pr(A given B) =
Pr(A), then the events
A and B are said to be
independent.

THE LAWS OF PROBABILITY demonstration

DRUG TRIALS STRONG STUFF: HOW EFFECTIVE IS
VIAGRA?

Statistics tell us that it is likely more effective that its advertising claims it to be. VIAGRA has shown improvement in
erectile function in 4 out of 5 men compared with 1 out of 4 for sugar tablets. -Ad, Conde-Nast Traveler, June 2000

What do these statistics mean about the effectiveness of VIAGRA? (80-25=55%?)

Actually, 55% is considerably lower than the true success rate of Viagra.

A recent magazine ad for Viagra stated that 80% of those in an experiment who used Viagra reported improvement,
as compared to 25% among those who had the placebo. The inclination is to subtract 25 from 80, and thus to
estimate Viagra's true effectiveness as 55%. Such a calculation, however, is harsh on Viagra. Among the 80% of
Viagra users who reported improvement, some physically benefited while the remainder improved for other reasons.
If Q is the fraction of users directly helped by the drug, then Q could be approximated from the linear equation: Q + .
25(1-Q) = .8 The idea here is that, like the users of the placebo, 25% of those who used Viagra but did not physically
benefit from it nonetheless reported improvements. 25% of 20% = 5%

5% of users that reported Viagra was effective is the result of placebo effect. Hence 75% of Q plus 25% response as
placebo effect equals the 80% that believed they were helped by Viagra. Q = .7333 ~= 73% The 80% of Viagra
patients who reported gains included the 73% with physical benefits and about 1/4 of the remaining 27% without such
benefits. Note that 73% is considerably higher than the 55% success rate that many readers might have inferred
from subtracting 25% from 80%.

Thus, Viagra users essentially fall into three categories:

73% who benefit physically

7% who benefit psychologically
20% who do not benefit