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Wh y u se Ba y esian data anal y sis ? FU N DAME N TAL S OF BAYE SIAN DATA AN ALYSIS IN R Rasm u s Bth Data Scientist Ba y es is fle x ible 1. Yo u can incl u de information so u rces in addition to the data . 2. Yo u can make an y

  1. Wh y u se Ba y esian data anal y sis ? FU N DAME N TAL S OF BAYE SIAN DATA AN ALYSIS IN R Rasm u s Bååth Data Scientist

  2. Ba y es is fle x ible 1. Yo u can incl u de information so u rces in addition to the data . 2. Yo u can make an y comparisons bet w een gro u ps or data sets . 3. Yo u can u se the res u lt of a Ba y esian anal y sis to do Decision Anal y sis . 4. Yo u can change the u nderl y ing statistical model . FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  3. Incl u ding information in addition to data Backgro u nd information E x pert opinion Common kno w ledge FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  4. FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

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  6. FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

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  11. FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  12. FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  13. Define an informed prior ! FU N DAME N TAL S OF BAYE SIAN DATA AN ALYSIS IN R

  14. Yo u'v e changed the prior ! FU N DAME N TAL S OF BAYE SIAN DATA AN ALYSIS IN R Rasm u s Bååth Data Scientist

  15. FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  16. FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  17. FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  18. Ne x t u p on reasons to u se Ba y esian data anal y sis 1. Yo u can incl u de information so u rces in addition to the data . 2. Yo u can make an y comparisons bet w een gro u ps or datasets . 3. Yo u can u se the res u lt of a Ba y esian anal y sis to do Decision Anal y sis . 4. Yo u can change the u nderl y ing statistical model . FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  19. FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  20. FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

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  23. Comparing Video and Te x t ads posterior video_prop text_prop 1 0.08 0.10 2 0.10 0.07 3 0.16 0.05 4 0.09 0.05 5 0.18 0.03 6 0.13 0.05 7 0.12 0.10 8 0.10 0.04 9 0.11 0.09 10 0.18 0.05 11 0.12 0.04 12 0.13 0.07 13 0.10 0.13 14 0.15 0.03 15 0.07 0.05 16 0.14 0.09 ... ... ... FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  24. Comparing Video and Te x t ads posterior$prop_diff <- posterior$video_prop - posterior$text_prop posterior video_prop text_prop prop_diff 1 0.08 0.10 -0.02 2 0.10 0.07 0.03 3 0.16 0.05 0.11 4 0.09 0.05 0.04 5 0.18 0.03 0.15 6 0.13 0.05 0.08 7 0.12 0.10 0.02 8 0.10 0.04 0.06 9 0.11 0.09 0.02 10 0.18 0.05 0.13 11 0.12 0.04 0.08 12 0.13 0.07 0.06 13 0.10 0.13 -0.03 14 0.15 0.03 0.11 15 0.07 0.05 0.01 ... ... ... ... FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  25. Ho w does the prop _ diff () distrib u tion look ? FU N DAME N TAL S OF BAYE SIAN DATA AN ALYSIS IN R

  26. It ' s eas y to compare and contrast ! FU N DAME N TAL S OF BAYE SIAN DATA AN ALYSIS IN R Rasm u s Bååth Data Scientist

  27. A probabilit y distrib u tion o v er an interesting parameter FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  28. A probabilit y distrib u tion o v er an interesting parameter FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  29. A probabilit y distrib u tion o v er an interesting parameter FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  30. A probabilit y distrib u tion o v er an interesting parameter FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  31. Ne x t u p on reasons to u se Ba y esian data anal y sis 1. Yo u can incl u de information so u rces in addition to the data . 2. Yo u can make an y comparisons bet w een gro u ps or data sets . 3. Yo u can u se the res u lt of a Ba y esian anal y sis to do Decision Anal y sis . 4. Yo u can change the u nderl y ing statistical model . FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  32. FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  33. FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  34. A small decision anal y sis video_cost <- 0.25 text_cost <- 0.05 visitor_spend <- 2.53 FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  35. video_cost <- 0.25 text_cost <- 0.05 visitor_spend <- 2.53 posterior video_prop text_prop 1 0.08 0.10 2 0.10 0.07 3 0.16 0.05 4 0.09 0.05 5 0.18 0.03 6 0.13 0.05 7 0.12 0.10 8 0.10 0.04 9 0.11 0.09 10 0.18 0.05 11 0.12 0.04 12 0.13 0.07 FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  36. video_cost <- 0.25 text_cost <- 0.05 visitor_spend <- 2.53 posterior$video_profit <- posterior$video_prop * visitor_spend - video_cost posterior video_prop text_prop video_profit 1 0.08 0.10 -0.04 2 0.10 0.07 0.00 3 0.16 0.05 0.15 4 0.09 0.05 -0.02 5 0.18 0.03 0.21 6 0.13 0.05 0.08 7 0.12 0.10 0.06 8 0.10 0.04 0.01 9 0.11 0.09 0.02 10 0.18 0.05 0.21 11 0.12 0.04 0.06 12 0.13 0.07 0.08 FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  37. video_cost <- 0.25 text_cost <- 0.05 visitor_spend <- 2.53 posterior$video_profit <- posterior$video_prop * visitor_spend - video_cost posterior$text_profit <-posterior$text_prop * visitor_spend - text_cost posterior video_prop text_prop video_profit text_profit 1 0.08 0.10 -0.04 0.21 2 0.10 0.07 0.00 0.12 3 0.16 0.05 0.15 0.09 4 0.09 0.05 -0.02 0.08 5 0.18 0.03 0.21 0.02 6 0.13 0.05 0.08 0.09 7 0.12 0.10 0.06 0.20 8 0.10 0.04 0.01 0.05 9 0.11 0.09 0.02 0.17 10 0.18 0.05 0.21 0.09 11 0.12 0.04 0.06 0.05 12 0.13 0.07 0.08 0.12 FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  38. video_cost <- 0.25 text_cost <- 0.05 visitor_spend <- 2.53 posterior$video_profit <- posterior$video_prop * visitor_spend - video_cost posterior$text_profit <-posterior$text_prop * visitor_spend - text_cost posterior$profit_diff <- posterior$video_profit - posterior$text_profit posterior video_prop text_prop video_profit text_profit profit_diff 1 0.08 0.10 -0.04 0.21 -0.26 2 0.10 0.07 0.00 0.12 -0.12 3 0.16 0.05 0.15 0.09 0.07 4 0.09 0.05 -0.02 0.08 -0.10 5 0.18 0.03 0.21 0.02 0.18 6 0.13 0.05 0.08 0.09 0.00 7 0.12 0.10 0.06 0.20 -0.14 8 0.10 0.04 0.01 0.05 -0.04 9 0.11 0.09 0.02 0.17 -0.15 10 0.18 0.05 0.21 0.09 0.12 11 0.12 0.04 0.06 0.05 0.00 12 0.13 0.07 0.08 0.12 -0.04 FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  39. Make a data informed decision ! FU N DAME N TAL S OF BAYE SIAN DATA AN ALYSIS IN R

  40. Change an y thing and e v er y thing FU N DAME N TAL S OF BAYE SIAN DATA AN ALYSIS IN R Rasm u s Bååth Data Scientist

  41. FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  42. FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  43. Ne x t u p on reasons to u se Ba y esian data anal y sis 1. Yo u can incl u de information so u rces in addition to the data . 2. Yo u can make an y comparisons bet w een gro u ps or data sets . 3. Yo u can u se the res u lt of a Ba y esian anal y sis to do Decision Anal y sis . 4. Yo u can change the u nderl y ing statistical model . FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  44. Completel y s w itch o u t the binomial model Wh y? Well , y o u ha v e some ne w data ... A banner ad for y o u r site . Yo u don ' t pa y per v ie w, y o u pa y per da y . A trial res u lted in 19 clicks in a da y Ho w man y dail y site v isits , sho u ld w e e x pect , on a v erage , if w e pa y for this banner ? FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  45. A model for co u nts per da y Split the da y into 1440 min u tes . What proportion of min u tes res u lts in a click on the ad ? FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

  46. A model for co u nts per da y Split the da y into 1440 min u tes . What proportion of min u tes res u lts in a click on the ad ? Split the da y into 86400 seconds . What proportion of seconds res u lts in a click on the ad ? FUNDAMENTALS OF BAYESIAN DATA ANALYSIS IN R

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