Poisson Estimation
In Chapter two of his book , Rasch jumps from his Equation 6.1 to an approximation, which he attributes to Poisson, but he not only provides no derivation of the approximation, but also omits to write out the approximation in general terms. I have found a page on the web , which sets out a cursory but satisfactory explanation of the approximation. Rasch calls the approximation Poisson's Law. The page on the web calls it the Poisson distribution or the Law of Rare Events. Let's begin with my Equation 3 from my previous blog. p{a|n} = (n!/((n-a)!a!))θ a (1-θ) n-a (3) Then according to the argument, if you focus on the right hand term, (1-θ) n-a , you can approximate that as: (1-θ) n-a ≈ e -n θ (4) where ≈ means is approximately equal to, θ is assumed to be low. The derivation involves isolating the left hand of the equation and taking the natural log: ln(1-θ) n-a = (n-a)ln(1-θ)...