What is Unconditional Probability
An unconditional probability is the independent chance that a single outcome results from a sample of possible outcomes. The term refers to the likelihood that an event will take place independent of whether any other events take place or any other conditions are present. The probability that snow will fall in Jackson, Wyoming on Groundhog Day, without taking into consideration the historical weather patterns and climate data for northwestern Wyoming in early February is an example of an unconditional probability.
BREAKING DOWN Unconditional Probability
The unconditional probability of an event can be determined by adding up the outcomes of the event and dividing by the total number of possible outcomes.
Unconditional probability is also known as marginal probability and measures the chance of an occurrence ignoring any knowledge gained from previous or external events. Since this probability ignores new information, it remains constant.
Example of Unconditional Probability
For example, let's examine a group of stocks. A stock can either be a winner, which earns a positive income, or a loser, which has a negative income. Out of five stocks, stock A and B are winners, while C, D and E are losers. What is the unconditional probability of choosing a winning stock? Since two outcomes out of a possible five will produce a winner, the unconditional probability is 40% ( 2 / 5 ).