Decision of Uncertainty Paper
The use of statistical data in decision making can be very helpful. Being able to use the statistics and formulate probabilities to help in the decision making process. There are several different types of statistical processes such as using confidence intervals, calculation of probability (Bayes’ Theorem), and hypothesis testing.
I am going out of town for vacation for a month and the decision has to be made on whether to purchase a home security system or take the chance of not having any defense. The reason for this is because leaving a house empty for a month is a risk. However, purchasing a home security system is a rather ...view middle of the document...
For the translation of the data and research that has been completed and collected the Bayes’ Theorem shall be used. Bayes’ Theorem is perfect for this decision because the evidence for this problem is very subjective. Bayes’ Theorem uses subjective probability where the opinions and information are interpreted as probabilities for calculation purposes. Thus, the confidence levels for the burglary of homes, burglary of homes with security systems, and burglary of homes without security systems will be predicted using Bayes’ Theorem.
Now that I have chosen the proper method to solve this problem I will input the numbers and calculate the confidence levels for all of the given subjective evidence. Not being burglarized will be notated by A1 and being burglarized will be notated by A2. I know that the probability of not being burglarized in general is 87%. So, the probability of being burglarized is 13%. The notation and probability for not being burglarized with a home security system is P(B/A1) = .86. The notation and probability for being burglarized and having a home security system is P(B/A2) = .14. Using Bayes’ Theorem to find the confidence level that shows that I will not be burglarized if a home security system is...