Bayesian Analysis

Bayes's theorem is often used in decision analysis, so it would be natural to think that Bayesian analysis is a generic term to describe decision analyses using the Bayes's theorem. On the contrary, Bayesian analysis refers to a school of thought in statistical analysis. It differs both operationally and conceptually from the two other traditional ways of carrying out statistical analysis: frequentist and likelihood based. Statisticians who adhere to the principles of Bayesian analysis sometimes call themselves Bayesians.

The goal of most statistical analysis is to make inferences about population parameters. These parameters are not observable directly but can be estimated using data. For example, incidence of a particular disease in a given country is a parameter. It is practically impossible to find the true incidence, ...