0 Up votes0 Down votes

9 views22 pagesStatistical Learning

Jan 10, 2015

© © All Rights Reserved

PDF, TXT or read online from Scribd

Statistical Learning

© All Rights Reserved

9 views

Statistical Learning

© All Rights Reserved

- Neuromancer
- The E-Myth Revisited: Why Most Small Businesses Don't Work and
- How Not to Be Wrong: The Power of Mathematical Thinking
- Drive: The Surprising Truth About What Motivates Us
- Chaos: Making a New Science
- The Joy of x: A Guided Tour of Math, from One to Infinity
- How to Read a Person Like a Book
- Moonwalking with Einstein: The Art and Science of Remembering Everything
- The Wright Brothers
- The Other Einstein: A Novel
- The 6th Extinction
- The Housekeeper and the Professor: A Novel
- The Power of Discipline: 7 Ways it Can Change Your Life
- The 10X Rule: The Only Difference Between Success and Failure
- A Short History of Nearly Everything
- The Kiss Quotient: A Novel
- The End of Average: How We Succeed in a World That Values Sameness
- Made to Stick: Why Some Ideas Survive and Others Die
- Algorithms to Live By: The Computer Science of Human Decisions
- The Universe in a Nutshell

You are on page 1of 22

to Statistical Learning

CLASSIFICATION METHODS

Chapter 04 (part 01)

LOGISTIC REGRESSION

Outline

Cases:

Orange Juice Brand Preference

Credit Card Default Data

Why Not Linear Regression?

Simple Logistic Regression

Logistic Function

Interpreting the coefficients

Making Predictions

Adding Qualitative Predictors

Multiple Logistic Regression

Juice

We would like to predict what customers prefer to buy:

The Y (Purchase) variable is categorical: 0 or 1

The X (LoyalCH) variable is a numerical value (between 0

loyal to the Citrus Hill (CH) orange juice

Can we use Linear Regression when Y is categorical?

When Y only takes on values of 0 and 1, why

Purchase

0.9

How do we

interpret values

greater than 1?

0.7

0.5

0.4

0.2

0.0

.0 .1 .2 .3 .4 .5 .6 .7 .8 .9 1.0

LoyalCH

How do we interpret

values of Y between 0

and 1?

Problems

The regression line 0+1X can take on any value

Therefore the regression line almost always predicts the

Instead of trying to predict Y, lets try to predict P(Y = 1),

Thus, we can model P(Y = 1) using a function that gives

outputs between 0 and 1.

We can use the logistic function

1

0.9

Logistic Regression!

0.8

0 + 1 X

e

p = P(Y = 1) =

0 + 1 X

1+ e

Probability

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0

-5

-4

-3 -2

-1

0

X

Logistic Regression

Logistic regression is very

guesses for 0 and 1?

MM

0.75

P(Purchase)

similar to linear

regression

We come up with b0 and

b1 to estimate 0 and 1.

We have similar problems

and questions as in linear

regression

0.5

CH

0.25

0

.0

.2

.4

.6 .7

.9

LoyalCH

We would like to be able to predict customers that are

likely to default

Possible X variables are:

Annual Income

Monthly credit card balance

The Y variable (Default) is categorical: Yes or No

How do we check the relationship between Y and X?

10

If we fit a linear regression

for very low balances we

predict a negative

probability, and for high

balances we predict a

probability above 1!

Pr(default) is negative!

11

Now the probability

of default is close

to, but not less

than zero for low

balances. And

close to but not

above 1 for high

balances

12

13

Interpreting 1

Interpreting what 1 means is not very easy with logistic

not Y.

If 1 =0, this means that there is no relationship between

Y and X.

If 1 >0, this means that when X gets larger so does the

probability that Y = 1.

If 1 <0, this means that when X gets larger, the

probability that Y = 1 gets smaller.

But how much bigger or smaller depends on where we

are on the slope

14

We still want to perform a hypothesis test to see whether

from zero.

We use a Z test instead of a T test, but of course that

doesnt change the way we interpret the p-value

Here the p-value for balance is very small, and b1 is

positive, so we are sure that if the balance increase, then

the probability of default will increase as well.

15

Making Prediction

Suppose an individual has an average balance of $1000.

For a balance of $2000, the probability is much higher,

16

Regression

We can predict if an individual default by checking if she is

Student coded as (Student = 1, Non-student =0).

b1 is positive: This indicates students tend to have higher

default probabilities than non-students

17

We can fit multiple logistic just like regular regression

18

Predict Default using:

Balance (quantitative)

Income (quantitative)

Student (qualitative)

19

Predictions

A student with a credit card balance of $1,500 and an

An Apparent Contradiction!

Positive

Negative

20

(Blue)

21

22

A student is risker than non students if no information

- REG3_LOGUploaded byAlruAlmu Bandar
- How to Interpret Regression Analysis Results_ P-values and Coefficients _ Minitab.pdfUploaded bydevanshu6594
- Logistic RegressionUploaded byMayur Hore
- minor presentaioUploaded bynaman vats
- Journal Of Social ScienceUploaded byAmri Maulana Fachri
- Lecture1-Module1-EconometricsUploaded bytarun19942008
- GDDSGSDUploaded byNooraFukuzawa Nor Fauziah
- Data Science PDFUploaded bykey stone
- Linear Correlation and RegressionUploaded bySylvia Cheung
- v3 522Uploaded byapi-285466724
- seismic.pptxUploaded byNarsim Iyengar
- Using Logistic Regression to InvestigateUploaded byThiago Vassalo
- PO Models With Complex Survey DataUploaded byakrause
- ceo duality1Uploaded bykohlinisha
- MELJUN CORTES IBM SPSS Logistic RegressionUploaded byMELJUN CORTES, MBA,MPA
- Pastyear Exam AnswerUploaded byhanhele
- Multiple Regression Analysis Using SPSS StatisticsUploaded byAmanullah Bashir Gilal
- parametricUploaded byAusgang
- AJSMS-2-4-348-355Uploaded byApam Benjamin
- Data Mining ChapterUploaded byஅனுசுபத்ரா செந்தூர்பாண்டியன்
- ma_chap3Uploaded byRandula Chandrarathne
- 141Uploaded bySHAIK MOHAMMAD ABUTALIB PARVEEZ Parveez
- Faisal's DHA SuffaUploaded byMaqsood Alam
- Role of Operations researchUploaded byKevin Ndemo
- Refinery Economics 2Uploaded byguhadebasis
- Bivariate Linear Mixed Model to Describe Yield Response Due to DiseaseUploaded byYao Lu
- Annotated 4 Ch4 Linear Regression F2014Uploaded byBob Hope
- Docslide.us Multivariate Calibration by h Martens and t Naes j Wiley Sons LtdUploaded byMarcos Silva
- RegressionUploaded bybibekmishra8107
- UC_issue_3Uploaded byJeanaLie P. Viernes

- 4-bypass_impulse_problem-ppt-handouts.pdfUploaded byJesusDiFabio
- Nai Dunia Rate CardUploaded byreleaseMyAd
- Lecture Notes on System Identification and Data AnalysisUploaded bychrisbatty
- Arun ResumeUploaded bytanvi_36
- Stauff Press Spr-prc-poc en 03-2016Uploaded byonlymotie
- MAT540 Student Version 1124Uploaded bymonel_2
- Asme Section II c Sfa-5.1 Sfa-5.1mUploaded byBryan Ortiz
- Activities Guide and Evaluation Rubric - Step 1 - Identification of Stakeholder and Environments of Virtual CourseUploaded byOscar leonardo Casamachin moreno
- Flow of power-law fluids past an equilateral triangular cylinder:Uploaded bySandeep Suresh
- 6596Uploaded byMatt Xavi Vela
- OM Test 1-Sample (Undergraduate)Uploaded byRobin T
- TYC - 07Uploaded byDebajyoti Datta
- Guidelines for Selection & Accreditation of Training Delivery Partner – ASDCUploaded byAutomotive Skills Development Council
- Deplaying MPLS Traffic EngineeringUploaded by万尼杨
- STL RepairUploaded byvardand
- Easy Auto Tuning GuideUploaded bypanderial
- Vandegrift Yavas, An Experimental Test of Performance Under Team ProductionUploaded byJames M. Mulcahy
- Upgrade Firmware GuideUploaded byAnthony Uchiha
- DCM ENGG..docUploaded byManil Kumar
- Decap PaperUploaded byTanmoy Roy
- Ifa Ritual PDFUploaded byAwoAkinyemi
- Producers CapabilitiesUploaded byisaaa
- Tool 01 Prepare - Standard Slides for OCM Presentations MASTERUploaded byGiannina Ailén Musacchio
- Sampling.pdfUploaded byDanily Faith Villar
- NLPQLGUploaded byrudsbr
- 013.pdfUploaded bySynths
- Material Jalan Raya 1Uploaded byArdi TA
- A Project Report OnUploaded byketanjc
- (2) Ekman, Paul - Lying and Deception (1997)Uploaded byDarihuz Septimus
- burrini1997Uploaded byCarlos Sopán Benaute

## Much more than documents.

Discover everything Scribd has to offer, including books and audiobooks from major publishers.

Cancel anytime.