Business Statistics Made Easy in SAS

Bayesian Statistics

Introduction

So far in the book, we have very much followed what is known as the classical approach to statistics. Bayesian statistics is an exciting alternative to the classical approach, which is gaining substantial traction in the business analytics world. In this section, I will give only the briefest introduction to the concept of Bayesian statistics.

Classical Statistics

In classical statistics we trust current data to give us a trustworthy model, with certain assumptions often built in like the normality of data. The model parameters are generated by the data, and once we have the parameters we often assume that they will apply to future samples. Say, for example, that we use a regression-type model to explain ...