Created using Colaboratory

This commit is contained in:
udlbook
2023-11-14 08:58:30 +00:00
parent d58115baaa
commit 96eeed8194

View File

@@ -4,7 +4,7 @@
"metadata": {
"colab": {
"provenance": [],
"authorship_tag": "ABX9TyPz0X4nKJUCBhv5l4Z/xUVo",
"authorship_tag": "ABX9TyNQPfTDV6PFG7Ctcl+XVNlz",
"include_colab_link": true
},
"kernelspec": {
@@ -59,7 +59,7 @@
"# Worked example: loans\n",
"\n",
"Consider the example of an algorithm $c=\\mbox{f}[\\mathbf{x},\\boldsymbol\\phi]$ that predicts credit rating scores $c$ for loan decisions. There are two pools of loan applicants identified by the variable $p\\in\\{0,1\\}$ that well describe as the blue and yellow populations. We assume that we are given historical data, so we know both the credit rating and whether the applicant actually defaulted on the loan ($y=0$) or\n",
" repaid it ($y=1).\n",
" repaid it ($y=1$).\n",
"\n",
"We can now think of four groups of data corresponding to (i) the blue and yellow populations and (ii) whether they did or did not repay the loan. For each of these four groups we have a distribution of credit ratings (figure 1). In an ideal world, the two distributions for the yellow population would be exactly the same as those for the blue population. However, as figure 1 shows, this is clearly not the case here."
],