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Chapter 20
This table displays the odds ratio of Previously defaulted for a unit change in the covariate Debt to
income ratio. The reported value is the ratio of the odds of default for a person with a debt/income
ratio of 10.9341 compared to the odds of default for a person with 9.9341 (the mean).
Note that because none of these predictors are part of interaction terms, the values of the odds
ratios reported in these tables are equal to the values of the exponentiated parameter estimates.
When a predictor is part of an interaction term, its odds ratio as reported in these tables will also
depend on the values of the other predictors that make up the interaction.
Summary
Using the Complex Samples Logistic Regression Procedure, you have constructed a model for
predicting the probability that a given customer will default on a loan.
A critical issue for loan officers is the cost of Type I and Type II errors. That is, what is
the cost of classifying a defaulter as a nondefaulter (Type I)? What is the cost of classifying a
nondefaulter as a defaulter (Type II)? If bad debt is the primary concern, then you want to lower
your Type I error and maximize your sensitivity. If growing your customer base is the priority,
then you want to lower your Type II error and maximize your specificity.Usually,bothare
major concerns, so you have to choose a decision rule for classifying customers that gives the
best mix of sensitivity and specificity.
Related Procedures
The Complex Samples Logistic Regression procedure is a useful tool for modeling a categorical
variable when the cases have been drawn according to a complex sampling scheme.
The Complex Samples Sampling Wizard is used to specify complex sampling design
specifications and obtain a sample. The sampling plan file created by the Sampling Wizard
contains a default analysis plan and can be specified in the Plan dialog box when you are
analyzing the sample obtained according to that plan.
The Complex Samples Analysis Preparation Wizard is used to specify analysis specifications
for an existing complex sample. The analysis plan file created by the Sampling Wizard can be
specified in the Plan dialog box when you are analyzing the sample corresponding to that plan.
The Complex Samples General Linear Model procedure allows you to model a scale response.
The Complex Samples Ordinal Regression procedure allows you to model an ordinal response.