Jaccard similarity is a measure of similarity between two doucuments. The Jaccard similarity to compare two documents, doc1 and doc2, works on the bag of words (say words1 and words2), and then calculates
| words1 ∩ words2 | / | words1 ∪ words2 |
That is the number of distinct words in both documents divided by the number of distinct words in the union. The Jaccard similarity is used heavily in document retrieval algorithms.
Defined on page 213