Define Likelihood and Maximum Likelihood Method

Likelihood and Maximum Likelihood Method

Likelihood

Likelihood is the probability that an observation is predicted by the specified model.

Maximum Likelihood

Maximum likelihood is the maximum probability that an observation is predicted by the specified model.

What is a possible model?

A model that predicts observations with a probability that exceeds a given minimum.

What is the most possible model?

A model that most likely predicts observations, i.e. that predicts the observations with the largest probability – most likely model, given the data.