Poisson and Normal Approximations
Two shortcuts. A binomial with many trials and a small success probability behaves like . A Poisson with a large mean behaves like , as long as you remember the continuity correction.
Learning objectives
- Approximate by when and .
- Approximate by when .
- Apply a continuity correction when using the normal approximation.
- Choose the right approximation, and justify it.
of bolts are faulty. In a box of , . Why is awkward, and what could replace it?
Core idea
: computing is tedious. Rare events among many trials look Poisson. And a Poisson with a large mean looks like a bell curve. Each approximation saves time with very little error.
for large , small (, ). for large (), with continuity correction.
1. Binomial → Poisson
P(exactly 2 faulty): exact and approximate.
- Goal
- Compare.
- Strategy
- .
- Exact.
- Approximate.
2. Poisson → Normal
Approximate.
- Goal
- Probability.
- Strategy
- with correction.
- Continuity correction.
- Standardise.
Match the mean (and variance); correct for continuity whenever switching to the normal.
Which approximation for ?
Summary
- Rare events: Poisson.
- Large mean: normal with correction.
- Approximation
- Simpler distribution giving nearly the same answers.
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