In probability theory and statistics, the event rate, commonly denoted by the Greek letter λ (lambda), represents the average number of times an event occurs within a specific interval. This could be time, area, volume, or any other measure relevant to the problem at hand.
For instance, if λ is 4 in our phone call problem, it means that, on average, 4 phone calls are received per day.
The significance of λ in the Poisson distribution is crucial because it directly influences the probabilities of different counts of the event occurring. To reiterate:
- When λ is higher, the probabilities of higher counts (k) occurring increase.
- When λ is lower, the event of interest occurs less frequently, resulting in lower probabilities for higher counts (k).
Hence, understanding and accurately determining λ is essential for making predictions using the Poisson distribution.