A laboratory blood test is 98% effective in detecting a certain disease if the person has the disease (sensitivity). However, the test also yields a "false positive" result for 0.5% of the healthy persons tested. (That is, if a healthy person is tested, then, with probability 0.005, the test result will show positive.) Assume that 2% of the population actually has this disease (prevalence). What is the probability a person has the disease given that the test result is positive?

Solution

Let $B_1$ be the event that a person has the disease, let $B_2$ be the event that a person does not have the disease and let A be the event that the test result is positive.

Given that 2% of the population actually has this disease (prevalence), that is $P(B_1) = 0.02$, $P(B_2) = 1 - P(B_1) = 0.98$.

Also a laboratory blood test is 98% effective in detecting a certain disease if the person has the disease (sensitivity). That is $P(A|B_1) = 0.98$.

And the test also yields a "false positive" result for 0.5% of the healthy persons tested. That is $P(A|B_2) = 0.005$.

The probability a person has the disease given that the test result is positive is

$$ \begin{aligned} P(B_1|A) &= \frac{P(A|B_1)P(B_1)}{P(A|B_1)P(B_1)+P(A|B_2)P(B_2)}\\ &=\frac{(0.98)(0.02)}{(0.98)(0.02)+(0.005)(0.98)}\\ &=\frac{0.0196}{(0.0196)(0.0049)}\\ &=0.8 \end{aligned} $$

Further Reading