Interpretation of Odds

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Interpretation of Odds

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Discuss the use of odds in logistic regression. Using some very simple numbers, make up a

simple numerical example and explain how odds and probabilities were calculated. How are

odds different from an odds ratio?

Response Guidelines

Respond to at least one other posting by evaluating the learners response. Do you agree or

disagree? Why? Do you consider this a good answer to the question? Why or why not?

Binary logistic regression is generally similar to multiple linear regression analyses in that both

seek to predict an outcome on the Y dependent variable from two or more predictor variables.

The main difference is binary logistic regression uses a dichotomous, instead of a quantitative Y

outcome variable to predict the nature of the relationship between predictor variables and group

membership. Since binary logistic regression uses a dichotomous outcome variable to represent

group membership, it does not satisfy assumptions of normality, equal variances across groups

and linearity unless the outcome variable is logistically transformed. However, it is important to

note that it is still imperative for a researcher to engage in preliminary data screening to examine

the presence of extreme outliers and whether the expected frequencies are greater than 5 (Warner,

2008).

Since the relationship between the predictors and dependent variable is not linear, the outcome

variable must be transformed by the natural logarithm of a ratio of odds to create a new variable

called a logit (L). This transformational statistical procedure allows scores on L to satisfy

assumptions of a linear regression model, thus rendering the probability estimates of the

regression equation more interpretable.

Odds are calculated by dividing the number of times an outcome of interest occurs by how many

times it does not occur with a minimum value is 0 and no upper limit. When odds are greater

than 1, the target even is more likely to happen, equal to 1 means equal chance of happening and

less than one indicates less of a chance of the target event happening. The odds ratio is a

comparison of odds of two different groups and has a lower limit of 0 and no fixed upper limit.

A ratio of odds is entered into the logit equation to determine the logit value (Li) compared to the

observed odds. Appropriate B coefficient values are entered into the logistic regression equation

to determine probabilities of group membership which most accurately represent observed group

membership.

A simple example of a binary logistic regression analysis would be determining the probability

of having heart disease (Y = 1) or no heart disease (Y = 0) among smokers (X = 1) and nonsmokers (X = 0). Say the odds of having heart disease among smokers is 60/40 = 1.50.

Therefore, the probability of having heart disease among smokers 1.5 times greater than not

having heart disease. So the odds ratio for heart disease among smokers is 60/40 / 40/60 = 2.25.

Therefore, the probability of having heart disease among smokers 2.25 times greater than among

non-smokers.

Anthony Rhodes

General Psychology PhD

References

Warner, R.M. (2008). Applied statistics: From Bivariate Through Multivariate Techniques.

Thousand Oaks, CA: Sage Publications. ISBN: 9780761927723.

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