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Calculate Bayesian probabilities in Excel

Calculate Bayesian probabilities in Excel - Microsoft Excel Tutorial

From the course: Learning Excel: Data Analysis

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Calculate Bayesian probabilities in Excel

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- [Instructor] Microsoft Excel worksheets are very well suited to performing Bayesian analysis. In this movie, I will show you how to implement our analysis of the Kahneman's Cabs problem. My sample file is 07_04_Calculating, and you can find it in the chapter seven folder of the exercise files collection. We've gone through the parameters of the problem several times in this chapter, so I'll just go ahead and start entering in the values and formulas. In cell B3, we need to establish the base rate of green cabs, and that is 85%. So in cell B3 I will type 85, and I have already formatted the cell with a percentage format, so I'll just press Enter. You don't need to type in the percent sign. And in B4 I'll type the accuracy, and remember that the court established that the witnesses were accurate 80% of the time. So 80, and Enter. Now we can find the probability cab is green or blue, and then the probability of the witness is correct or incorrect. So in B6, we need the probability that…

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