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Adjusted variances

 

Now, we are interested not only in how we obtain our adjusted expectations for tex2html_wrap_inline8580 and tex2html_wrap_inline8582 , but also in how valuable the adjustment is in terms of reducing uncertainty. To this purpose we examine the adjusted variances: in terms of our general notation we have approximately

eqnarray672

Here, tex2html_wrap_inline8864 is our notation for the uncertainty remaining in tex2html_wrap_inline8866 in the light of the information contained in tex2html_wrap_inline8806 , so we expect uncertainty in tex2html_wrap_inline8580 to reduce from tex2html_wrap_inline8872 to tex2html_wrap_inline8874 ; and the uncertainty in tex2html_wrap_inline8582 to reduce from tex2html_wrap_inline8694 to tex2html_wrap_inline8880 . We call the difference between these two values the resolved variance, and we also determine the resolution, which is a scale-free measure of the reduction in variance. For the belief structure taken as a whole we can determine analagous results.

For each quantity, we can decompose the initial variation into portions remaining and resolved. For tex2html_wrap_inline8580 the decomposition is

displaymath8852

For tex2html_wrap_inline8582 the decomposition is

displaymath8853

The resolution for each quantity can lie between zero and unity inclusive, with a resolution of zero implying that we expect the adjustment to be completely uninformative, and a resolution of unity implying that we expect the adjustment to be completely informative. For our two quantities tex2html_wrap_inline8580 and tex2html_wrap_inline8582 we obtain

eqnarray718

which tells us that by adjusting on tex2html_wrap_inline8806 , we reduce the uncertainty in tex2html_wrap_inline8580 by about 31%, and we reduce the uncertainty in tex2html_wrap_inline8582 only by about 5%. The adjustment is informative in only a limited sense for tex2html_wrap_inline8580 , and hardly at all for tex2html_wrap_inline8582 .



David Wooff
Thu Oct 15 12:20:04 BST 1998