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Likelihood

As explained in Build a Robo-Advisor with Python (From Scratch)

A likelihood is the probability of observed data conditional on a specified parameter value or hypothesis.

A likelihood is the probability of observed evidence conditional on a specified hypothesis or parameter value. In Bayes’ rule, P(B|A) is the likelihood, while P(A) is the prior and P(A|B) is the posterior. Likelihood measures how compatible the evidence is with the assumed condition; it is not itself the posterior probability. section 12.2

Height and professional basketball

Let A mean that a randomly chosen person is over six feet tall and B mean that the person plays professional basketball. The likelihood P(B|A) describes the probability of professional basketball membership among people over six feet tall. Observing B then raises the probability of A from its unconditional rate of about 0.0000013636 to about 0.0000193, illustrating Bayesian updating from prior and likelihood to posterior. section 12.2

The same structure extends from binary events to distributions. A parameter θ, such as an exponential rate or normal mean, is treated as uncertain; its prior describes beliefs before data, and the likelihood contributes the observed-data information used to form a posterior distribution. section 12.2

How Build a Robo-Advisor with Python (From Scratch) covers it

How deep it goes
Defines likelihood through conditional probability and extends it to uncertain distribution parameters, without deriving posterior distributions.
Examples
Uses professional basketball membership and height, then generalizes to exponential-rate and normal-mean parameters.
What it assumes
Assumes probability notation and conditional probability while defining prior, likelihood, evidence, and posterior terminology.
What you can do after
Evaluate how observed evidence changes beliefs about hypotheses or uncertain distribution parameters.
How it connects
Connects likelihood with conditional probability, Bayes’ rule, prior probability, posterior probability, and probability distribution functions.

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This explainer was generated by Manning's knowledge graph from the text of Build a Robo-Advisor with Python (From Scratch). The section links point to the parts of the book it draws on.