Bayesian Average

A Bayesian average is a method of estimating the mean of a population consistent with Bayesian interpretation, where instead of estimating the mean strictly from the available data set, other existing information related to that data set may also be incorporated into the calculation in order to minimize the impact of large deviations, or to assert a default value when the data set is small.

For example, in a calculation of an average review score of a book where only two reviews are available, both giving scores of 10, a normal average score would be 10. However, as only two reviews are available, 10 may not represent the true average had more reviews been available. The review site may instead calculate a Bayesian average of this score by adding the average review score of all books in the store to the calculation. For example, by adding five scores of 7 each, the Bayesian average becomes 7.86 instead of 10, which the review site would hope that it will better represent the quality of the book.

Note that the additional information incorporated into the mean calculation does not have to be the true prior mean of the larger population, but rather a value subjectively determined by the person calculating the average as relevant and serving the purpose of the calculation. Therefore, the quality of the Bayesian average (in term of representing the data set) is dependent on the judgment of the person doing the calculation.