16.4 The subjective approach

Many probabilities cannot be computed using the classical or relative frequency approach; for example:

What is the probability that Queensland will experience a Category 1 cyclone next year?

In this case, only a subjective probability can be given.

‘Subjective’ probabilities are not ‘made up’; it means the probability can be estimated by considering all the relevant issues that may impact the probability (and may, for example, be based on mathematical models that incorporate information from numerous inputs). Depending on how these other issues are considered and combined, different individuals may give different subjective probabilities.

Weather forecasts are one example: weather forecasts incorporate data from sea surface temperatures, topography, air pressures, air temperatures and so on. Different models use different inputs, and then may coombine these inputs differently to produce different (subjective) forecast probabilities.

Definition 16.6 (Subjective approach to probability) In the subjective approach to probability, various factors are incorporated, perhaps subjectively, to determine the probability of an event occurring.
Example 16.9 (Subjective probability) Many farmers, based on many years of experience, can give a subjective probability of the chance of receiving rainfall in the coming month.

Think 16.2 (Probability approaches) Which approach is best used to estimate a probability in these situations?

  1. The probability that the Reserve Bank will drop interest rates next month.
  2. The probability that a randomly-chosen person writes left-handed.
  3. The probability that a King will be randomly chosen from a pack of cards?
  4. The probability that Buderim receives more than 100mm of rain next May.
1: Subjective; 2: Relative frequency; 3: Classical; 4: Probably subjective.