Solved – Lambda – Exponential vs. Poisson Interpretation

exponential distributionpoisson distributionself-study

I'm trying to understand $\lambda$'s role in both the Poisson and Exponential Distributions and how it is used to find probabilities (yes, I have read the other post regarding this topic, didn't quite do it for me).

What (I think) I understand:

  1. Poisson Distribution –

    • discrete

    • $\lambda$ is defined as the average number of successes (however "success" is defined, given problem context) per unit of time or space

    • PMF: $~~P(X = k;\lambda) = \frac{ \lambda^ke^{-\lambda} }{k!} $

    • $P(X\leq k) = P(X = 0)~+~P(X = 1)~+~P(X = 2)~+~\ldots~+~P(X = k)$

    • $P(X< k) = P(X = 0)~+~P(X = 1)~+~P(X = 2)~+~\ldots~+~P(X = k~-~1)$

    • $P(X\geq k) = 1~-~P(X<k)$

    • $P(X > k) = 1~-~P(X\leq k)$

  2. Exponential Distribution –

    • continuous

    • $\lambda$ is defined as the average time/space between events (successes) that follow a Poisson Distribution

    • Where my understanding begins to fade:

    • PDF: $~~f(x; \lambda)~=~ \lambda e^{-\lambda x} $

    • CDF: $ P(X \leq k; \lambda)~=~1~-~e^{-\lambda x} $

    • $ P(X > k; \lambda) ~=~ 1 ~-~P(X \leq k; \lambda)~=~e^{-\lambda x}$

Where I think the misunderstanding lies:

As of now I'm assuming $\lambda$ can be interchanged between the two distributions. Is this the case? I have briefly read about, "re-parameterizing" and I think that might be the key, but I don't know what that process is referring to. How do I do this and how does it affect the PMF and CDF of the exponential distribution?

This all came from a problem asking: Given a random variable X that follows an exponential distribution with lambda = 3, find P(X > 8). My approach was $ e^{-3*8} $, which gives a probability that seems far too low.

Best Answer

Suppose I am waiting for a bus at a stop. And suppose that a bus usually arrives at the stop in every 10 mins. Now I define λ to be the rate of arrival of a bus per minute. So, λ = (1/10).

Now I want to compute the probability that no bus arrives in the next minute. I can do it using both the poisson and the exponential distribution.

Poisson

λ = 1/10

Probability of 0 arrivals in the next minute: P(X = 0) = 0.9048

Exponential

λ = 1/10

Probability of my having to wait for more than 1 minute: P(X>1) = 0.9048

Note: Look at the expected values of both the distributions. For Poisson, we get that the average number of buses arriving per minute E(X) = λ = 0.10 buses. For exponential, the average waiting time for a bus to arrive E(X) = (1/λ) = 10 mins