Steve Miller wrote an article a couple weeks ago on using Bayesian statistics for risk management. He describes his friend receiving a positive test on a serious medical condition and being worried. He then goes on to show why his friend needn’t be worried, because statistically there was a low probability of actual having the condition, even with the positive test.
Understanding risk is an interest of mine, and while I’ve read articles about Bayesian math in the past, the math is above my head. I never studied statistics, nor do I plan to. But I am interested in the concepts behind statistics, so I can understand probabilities better. And I can do basic math. Steve’s article was dense with math I didn’t quite get, but I was able to translate it into something I could understand.
So now, for statistically challenged individuals, I present my translation of Steve’s calculations, Bayesian math for dummies.