Table of Contents
What is information discuss the value and use of information?
Information Uses. People use information to seek meaning in a variety of situations. Sometimes they use information instrumentally, to do something tangible (e.g., to acquire a skill or reach a goal). Other times, information is used cognitively (e.g., to generate ideas).
What is weight evidence?
Weights of evidence is a quantitative method for combining evidence in support of a hypothesis. The method was originally developed for a nonspatial application in medical diagnosis, in which the evidence consisted of a set of symptoms and the hypothesis was of the type “this patient has disease x”.
What is IV in logistic regression?
IV – A numerical value that quantifies the predictive power of an independent continuous variable x in capturing the binary dependent variable y. IV is helpful for reducing the number of variables as an initial step in preparing for Logistic Regression, especially when there are a large amount of potential variables.
Why should WoE be monotonic?
The WoE transformation through monotonic binning provides a convenient way to address each of aforementioned concerns. It is also worth mentioning that a numeric variable and its strictly monotone functions should converge to the same monotonic WoE transformation.
What are two characteristics of valuable information?
Clear, understandable, and objective are all characteristics that make information easy to use. The style, grammar, and technical terminology need to have the end-user in mind.
Its value is related to the person who uses it, when he uses it and for what he uses it. Any assessment of the value of information is therefore related to the value of the decision-making supported by such information. For example consider two persons lost in the Sahara desert.
What is the formula for information value ( IV )?
What is Information Value (IV)? Information value is one of the most useful technique to select important variables in a predictive model. It helps to rank variables on the basis of their importance. The IV is calculated using the following formula : IV = ∑ (% of non-events – % of events) * WOE
How are weight of evidence and information value related?
These two concepts – weight of evidence (WOE) and information value (IV) evolved from the same logistic regression technique. These two terms have been in existence in credit scoring world for more than 4-5 decades. They have been used as a benchmark to screen variables in the credit risk modeling projects such as probability of default.