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Base rate is a value reflecting the relative frequency of a well-defined, unique category of items or events in a well-defined population. Examples of statements illustrating base rates include the following:

  • Hispanics constitute 0.38 of the population in Los Angeles.
  • Three out of a thousand people in the population at large are afflicted with Crohn’s disease.
  • In a certain town, 85% of the cabs are green, and the remaining 15% are blue.
  • A certain meeting was attended by 70 engineers and 30 lawyers.
  • Five percent of the children in this school district have been diagnosed with attention-deficit/hyperactivity disorder.

All of these statements denote a base rate or provide the necessary information to calculate it.

Knowledge of base rate is important for two main reasons. First, it allows not only for the ...

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