Applications of Lognormal Distribution
1. Rubik’s Cube Solving Times: The time taken by individuals to solve a Rubik’s Cube, whether by an individual or as part of a general population, often follows a lognormal distribution. This distribution can help analyse and predict solving times.
2. Social Media Comments: The length of comments posted on social media discussion forums can be modelled by a lognormal distribution. Understanding the distribution of comment lengths can help in content moderation and engagement analysis.
3. Online Article Reading Time: The time spent by users reading online articles, whether they are news articles, jokes, or other content, can often be described by a lognormal distribution. This information is valuable for content creators and marketers.
4. Income Distribution: In economics, the lognormal distribution is used to analyse income distributions, particularly for the majority of the population and helps in understanding how incomes are spread out among different income groups.
5. Stock Market Fluctuations: Lognormal distributions are used in finance to analyse stock market fluctuations and asset prices. They are particularly useful for modelling the distribution of asset returns, which often exhibit right-skewed patterns.
Lognormal Distribution in Business Statistics
In business statistics, Lognormal Distribution is a crucial probability distribution model as it characterises data with positive values that show right-skewed patterns, which makes it suitable for various real-world scenarios like stock prices, income, resource reserves, social media, etc. Understanding Lognormal Distribution helps in risk assessment, portfolio optimisation, and decision-making in fields, like finance, economics, and resource management.
Table of Content
- Probability Density Function (PDF) of Lognormal Distribution
- Lognormal Distribution Curve
- Mean and Variance of Lognormal Distribution
- Applications of Lognormal Distribution
- Examples of Lognormal Distribution
- Difference Between Normal Distribution and Lognormal Distribution
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