Odds ratios represent the probability of a certain event and are often used in medical research. They provide a comparison estimate between two variables and show a proportionate value between them. For example, an odds ratio may state that women have a 1 in 5 chance of developing breast cancer. This ratio shows the proportion of how many women get breast cancer compared to the total number of women in the population.
Definition

Odds ratios are developed to show the probability that something will happen. Most of the time, people develop odds ratios using historical information or past experiences.
Calculating an Odds Ratio

If you go fishing in a lake and catch 10 fish, three of which are bass and seven of which are bluegill, you can create an odds ratio. In total, there were 10 fish, so the ratios are 3 out of 10 for bass and 7 out of 10 for bluegill. To calculate the odds of catching a bluegill in comparison to catching a bass next time you fish, divide 7/10 by 3/10 to get 7:3.
Purpose

Odds ratios are designed to give information. They take information and condense it into a simple proportion that offers insight regarding how strong one variable is compared to another. People who research issues in the medical field often use these ratios as a part of statistics to show the proportion of two variables and the likelihood of something happening. These statistics are demonstrated in many places, such as articles in newspapers and magazines.
Example

Odds ratios are common in the medical field. For example, you might read a newspaper story about the odds of a child having autism spectrum disorder. For example, the article might reference data collected by the Centers for Disease Control and Prevention indicating that in 2010 an estimated 1 in 68 children in the United States had been diagnosed with ASD. For comparison purposes, the writer might further mention that 1 in 150 children had been identified with ASD in 2000, according to CDCP.
References
 Photo Credit Michael Blann/Digital Vision/Getty Images