What is Poisson distribution?

The Poisson distribution is a discrete probability distribution for the counts of events that
occur randomly in a given interval of time (or space).
If we let X = The number of events in a given interval. Then, if the mean number of events
per interval is m, the probability of observing x events in a given interval is given by
P(X = x) = e−m. mx /x! , x = 0, 1, 2, 3, 4, . . .
Where, m is the parameter of the distribution. We say X follows a Poisson distribution with
parameter m.
Note: e is a mathematical constant and e = 2.7182.
The shape of the Poisson distribution
1. Unimodal;
2. Positive skew (that decreases as m increases);
3. Are centred roughly on m;
4. Have variance (spread) that increases as m increases.
Real life examples
Many experimental situations occur in which we observe the counts of events within a set
unit of time, area, volume, length etc. For example,
1. The number of cases of the Covid-19 in different countries;
2. The number of mutations in given regions of a Coronavirus;
3. The number of mistakes per page in printing;
4. The number of telephone calls in a given time;
5. The number of births/deaths per hour during a given day;
6. The number of accidents per hour during a given day
Properties of Poisson distribution
1. Mean = m
2. Variance = m, S.D. = √m
3. Coefficient of variation = 1/√m
4. Mode = m, m-1
5. Range = 0 to ∞
6. Skewness = 1/√m
7. Kurtosis = 3 + 1/m
8. m = np
What is the relationship between the binomial distribution and the Poisson
distributions?
The binomial distribution tends toward the Poisson distribution as n → ∞, p → 0 and np stays
constant. The Poisson distribution with λ = np closely approximates the binomial distribution
if n is large and p is small. The Poisson distribution is typically used as an approximation to
the true underlying reality. It can be difficult to determine whether a random variable has a
Poisson distribution.
Problem: A life insurance agent sells on the average of 3 life insurance policies per week.
Use Poisson's law to calculate the probability that in a given week he will sell
1. Some policies
2. 2 or more policies but less than 5 policies.
3. Assuming that there are 5 working days per week, what is the probability that in a given
day he will sell one policy?
Solution:
Here, μ = 3
(a) "Some policies" means "1 or more policies".
P(X > 0) = 1 − P(x = 0)
P(X) = (e-m - mx)/x!
P(X=0) = (e-3 - 30)/0!
= 4.9787 x 10-2
Therefore the probability of 1 or more policies is given by:
P(X > 0) = 1 − P(x = 0)
=1−4.9787×10−2
=0.95021
(b) The probability of selling 2 or more, but less than 5 policies is:
P(2≤X<5) = P(x = 2) +P(x = 3) + P(x = 4)
= (e-3 – 32)/2! + (e-3 – 33)/3! + (e-3 – 34)/4!
=0.61611
(c) Average number of policies sold per day: 3 / 5= 0.6
So on a given day, P(X) = (e-0.6 – 0.61)/1!
=0.32929
Problem:
If electricity power failures occur according to a Poisson distribution with an average
of 3 failures every twenty weeks, calculate the probability that there will not be more than
one failure during a particular week.
Solution:
The average number of failures per week is: m = 3/20 = 0.15
"Not more than one failure" means we need to include the probabilities for 1 failure".
P(x = 0) + P(x = 1)
= (e-0.15 – 0.150)/0! + (e-0.15 – 0.151)/1!
= 0.9898
Problems on Poisson distribution
1. A milk plant manufacturing ghee pouches; there are small chances of 1/500 for any ghee
pouch to be defective. These pouches are supplied in packet of 10. What will be the
approximate number of pouches containing no defective, one defective, two defective and
three defective ghee pouches in a consignment of 5,000 pouches?
Hints:
In this exercise p = 1/500, n = 10 therefore m = 10/500 = 0.002
E(0) = N P(0) = 5000 (0.9802) = 4901
E(1) = N P(1) = 5000 (0.0196) = 98
E(2) = N P(2) = 5000 (0.0002) = 1
E(3) = N P(3) = 5000 (0) = 0
2. According to a survey a university professor gets, on average, 7 emails per day. Let X = the
number of emails a professor receives per day. The discrete random variable X takes on the
values x = 0, 1, 2 …. The random variable X has a Poisson distribution: X ~ P(7). The mean is
7 emails.
a. What is the probability that an email user receives exactly 2 emails per day?
b. What is the probability that an email user receives at most 2 emails per day?
c. What is the standard deviation?
3. Text message users receive or send an average of 1.5 text messages per day.
a. How many text messages does a text message user receive or send per hour?
b. What is the probability that a text message user receives or sends two messages per hour?
c. What is the probability that a text message user receives or sends more than two messages
per hour?
4. In a manufacturing process, there is a 2% defective rate for a certain product. If a sample
of 200 products is selected, what is the probability that exactly 5 of them are defective,
using the Poisson distribution as an approximation to the Binomial distribution?
Solution:
According to the given information, the probability of success (defective product) is p =
0.02 (2% defective rate), and the number of trials is n = 200. Using the formula for the
average rate of occurrence in a Poisson distribution m = np, we can calculate.
M = np = 200 × 0.02 = 4
Now, we can use the Poisson distribution formula to find the probability of exactly 5
defective products x = 5, P(X = x) = e−m. mx /x!
Calculate the individual components:
e-4 ≈ 0.0183, 45 = 1024, and 5! = 120
Substitute these values into the formula:
P(X=5) = 0.15616
∴ the probability of exactly 5 defective products in a sample of 200, using the Poisson
distribution as an approximation to the Binomial distribution, is approximately 0.15.

Derive the mean and variance of a Poisson distribution

We have to prove that the mean of a Poisson distribution is np
Mean = E(X) =∑xp = x∑f(X) = ∑x e−m. mx /x!
X = 0, 1, 2, ....., n
= 0. e−m. m0 /0! + 1. e−m. m1 /1!+ 2. e−m. mx /2! + ....+n. e−m. mn /n!
= 0. e−m.1 + 1. e−m. m + 2. e−m. m2 / 2 + ...+ n. e−m. mn /n
= 0 + e−m. m + e−m. m2 + ...+ e−m. mn
= e−m. m [1 + m + ... + mn-1]
= e−m. m. em
= m. em-m
= m. e0
=m
Variance = E(X2) – E(X)2
As E(X) = m, E(X)2 = (m)2
E(X2) =∑x2.p
= [x(x-1) + x]. ∑e−m. mx /x!
= x(x-1) ∑ e−m. mx /x! + x∑ e−m. mx /x!
x∑ e−m. mx /x! = m
We have to derive the value of ∑x(x-1) e−m. mx /x!
X = 0, 1, 2, ....., n
= 0(0-1) e−m. m0 /0! + 1(1-1) e−m. m1 /1! + 2(2-1) e−m. m2 /2! + ....+ n(n-1) e−m. mn /n!
= 0 + 0 + 2 e−m. m2 / 2 + ...+ n(n-1) e−m. mn /n!
=
e−m. m2 + ...+ (n-1) e−m. mn
= e−m. m2 [1 + ... + (n-1) mn-2]
= e−m. m2 . em
= e0. m2
=
m2
Variance = E(X2) – E(X)2
= m2 + m - m2
=m
S.D. = Variance = m