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Sunday Feb 05, 2006
New Location!
Check out my new blog location for Predict This! at bloglines.com
Posted at 11:37AM Feb 05, 2006 by tilmannsblog in The Predictive Business | Comments[0] Technorati Profile Posted at 01:27AM Feb 05, 2006 by tilmannsblog in The Predictive Business | Comments[0]
Monday Jan 16, 2006
The Accuracy Paradox
Table 1: Table of Confusion for Fraud Model M1Fraud. The accuracy for model M1Fraud computes to:
With an accuracy of 98.0% model M1Fraud appears to perform fairly well. However, the Accuracy Paradox lies in the fact that accuracy can be easily improved to 98.5% by always predicting "no fraud". The table of confusion and the accuracy for this trivial “always predict negative” model M2Fraud are shown below.
Table 1: Table of Confusion for Fraud Model
M2Fraud.
Posted at 03:40PM Jan 16, 2006 by tilmannsblog in The Predictive Business | Comments[0]
Saturday Jan 14, 2006
Seminar on Computational Learning and Adaptation
Seminar on Computational Learning and Adaptation Business Impact of
Predictive Analytics In commercial applications of predictive modeling, the
ultimate objective is typically to maximize Return On Investment (ROI).
However, literature, conferences, and training often
stops short of providing techniques for ROI maximization. With an
apparent lack of know-how for maximizing ROI, analysts often have to
rely on technical metrics, such as ROC, accuracy, precision, or similar
metrics to optimize predictive models. In this presentation, I will
explore the problem of assessing the ROI for predictive analytics
applications, break down the drivers of ROI, and show how to compute
ROI. I will also present an example ROI analysis to demonstrate that
one predictive model can have negative or positive ROI based on the
business context in which it is used, even though technical quality
metrics of the predictive model do not change.
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