What is the Gamma Distribution?
The Gamma distribution is a family of right-skewed, continuous probability distributions used in statistics and probability theory. The gamma distribution arises naturally in processes where the waiting times between events are relevant, and can be thought of as a waiting time between Poisson distributed events. The gamma distribution depends on the scale factor and the shape factor. Thus we can say that the gamma distribution is well defined by these two parameters, scale factor and shape factor. When the gamma distribution is represented as the sum of the exponential distribution variables, we can say that shape factor denotes the number of variables present and scale factor becomes the mean of the exponential distribution. There are different cases of gamma distribution, which include exponential, erlang, and chi-squared.
Why is this Useful?
The gamma distribution can be used for queuing models and to model errors in multilevel Poisson regression models. The gamma distribution is moderately skewed, which means it can be used very well in many different areas. It can be used as a model for climatic conditions or in financial services to model different patterns.
Applications of the Gamma Distribution
- Statistical Analysis
- Civil Engineering
- Climatology
- Finance
