Log-Normal Distribution (Continuous)¶
The logarithm of the random variable is normally distributed. Used when data can only be positive and has a long right tail (many small values, few very large ones).
- Function: PDF
Use Case & Example:
| Scenario | Characteristics |
|---|---|
| Income/Wealth | Most people have moderate incomes, but a few have extremely high incomes (long right tail). |
| House Prices | Prices cannot be negative, and there are many affordable houses and a few highly expensive ones. |
| Duration/Lifespan | Modeling the time a device or component lasts before failure. |