we all tend to make probability predictions about how bad traffic will be during a certain time.įor example, if you think there’s a 90% probability that traffic will be heavy from 4PM to 5:30PM in your area then you may decide to wait to drive somewhere during that time. Ordinary people use probability every day when they decide to drive somewhere.īased on the time of day, location in the city, weather conditions, etc. that will minimize the effects done by the natural disaster. If the probability is quite high, then the department will make decisions about housing, resource allocation, etc. The environmental departments of countries often use probability to determine how likely it is that a natural disaster like a hurricane, tornado, earthquake, etc. Grocery stores often use probability to determine how many workers they should schedule to work on a given day.įor example, a grocery store may use a model that tells them there is a 75% chance that they’ll have more than 800 customers come into the store on a given day.īased on this probability, they’ll schedule a certain amount of workers to be at the store on that day to handle that many customers. Individuals who are likely to spend more on healthcare will be charged higher premiums because the insurance company knows that they’ll be more expensive to insure. to determine that there’s a 90% probability that a certain individual will spend $10,000 or more on healthcare in a given year. Health insurance companies often use probability to determine how likely it is that certain individuals will spend a certain amount on healthcare each year.įor example, a company might use factors like age, existing medical conditions, current health status, etc. This means they’ll need to make sure they have at least 100 products on hand to sell (or preferably more) so they don’t run out. For example, a company might use a forecasting model that tells them the probability of selling at least 100 products on a certain day is 90%. This allows the companies to predict how much inventory they’ll need. Many retail companies use probability to predict the chances that they’ll sell a certain amount of goods in a given day, week, or month. Note: A real-life example of a site that uses probability to perform political forecasting is FiveThirtyEight. to give voters an idea of how likely it is that each candidate will win. Political forecasters use probability to predict the chances that certain candidates will win various elections.įor example, a forecaster might say that candidate A has a 60% chance of winning, candidate B has a 20% chance of winning, candidate C has a 10% chance of winning, etc.

Probability is heavily used by sports betting companies to determine the odds they should set for certain teams to win certain games.įor example, a sports betting company may look at the current record of two teams and determine that team A has a 90% probability of winning while team B has just a 10% probability of winning.īased on these probabilities, the company would offer a higher payout for people who bet on team B to win since it’s highly unlikely that team B will actually win. on a given day in a certain area.įorecasters will regularly say things like “there is an 80% chance of rain today between 2PM and 5PM” to indicate that there’s a high likelihood of rain during certain hours. Probability is used by weather forecasters to assess how likely it is that there will be rain, snow, clouds, etc. Perhaps the most common real life example of using probability is weather forecasting. The following examples share how probability is used in 10 real-life situations on a regular basis.

Probability is used in all types of areas in real life including weather forecasting, sports betting, investing, and more. Probability refers to how likely an event is to occur.

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