Law Of Large Numbers (Noun)
Meaning
(statistics) law stating that a large number of items taken at random from a population will (on the average) have the population statistics.
Classification
Nouns denoting cognitive processes and contents.
Examples
- The law of large numbers states that as the sample size increases, the average of the sample will be closer to the true population mean.
- A classic example illustrating the law of large numbers is flipping a coin many times, eventually resulting in nearly the same number of heads and tails.
- Thanks to the law of large numbers, casinos can expect the overall odds of games such as roulette to even out over time.
- Insurance companies take advantage of the law of large numbers to set their rates, understanding that certain risks apply to some, but not all of their policyholders.
- By exploiting the law of large numbers, polls can accurately estimate the opinions of the population based on a randomly sampled subgroup.