Step 4

• Choose Lens Blur from the Filter > Blur menu
• Once the Lens Blur dialog opens hold down the the Alt key and click the Reset button (Lens Blur will be set t the default values)
• Choose the Alpha Channel form the Depth Map: Source drop down menu

 

Select the Alpha Channel as the Depth Map

 

Step 5

• Clicking the area that we want to remain in focus (the statue) causes the Blur Focal Distance slider to automatically move from 0 to 255 (remember 255 is white).
• Next we increase the value of  Iris: Radius slider and watch the background (black area) go out of focus. Adjust blur to taste!
• Zooming into image so that we can view the subject and background at the same time enables us to determine the Noise Amount that needs to be added to the image so that the blurred area doesn't look unnatural.

The Radius slider located within the Iris section of the Lens Blur panel allows us to adjust the amount of blur applied to the image. In this example a value of 0 results in no blur and  a value of 255 is maximum blur.

 

Adjust the Blur Focal Distance, Radius and Noise Amount for effect

 

Final Image

 

There is much more to Lens Blur than I've shown in this tutorial e.g. the use of a black to white Gradient in lieu of the selection can be used to represent the effect of depth of field.