Scribd
Upload
9 views29 pages

BA TopicB LoR

Uploaded by

rahulislam.dm253059
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
9 views29 pages

BA TopicB LoR

Uploaded by

rahulislam.dm253059
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 29

Business Analytics

(Term 3, PGDM, Jan-March 2024)

--
Topic B
Topic: Probabilistic Prediction
(Classification – Logistic Regression
--
Rushikesh P Borse, PhD
Faculty – Analytics, Great Lakes Institute of Management, Chennai
Contents to be discussed…

• Regression
• Problems with linear regression
• Odds
• Logistic regression
• Case Study + Business Implications
• Implementation on Excel (Logit)
Where all do we need to predict a Class?
Different (Classification) Prediction Techniques

• Logistic Regression
• Artificial Neural network (ANN)
• Decision Trees
• Naïve Bayes
• Support Vector Machines (SVM)
• KNN classifier
• Random forest
• Ensemble learning techniques
• Deep Learning (CNN)
Different (Classification) Prediction Techniques

• Logistic Regression
• Artificial Neural network (ANN)
• Decision Trees
• Naïve Bayes
• Support Vector Machines (SVM)
• KNN classifier
• Random forest
• Ensemble learning techniques
• Deep Learning (CNN)
Application of Logistic Regression in…

• Analyze customer data and predict


whether or not they are likely to
purchase a particular product.
Application of Logistic Regression in…

• To Assess credit risk and determine the


probability of defaulting on a loan.
Application of Logistic Regression in…

• It can be used in healthcare to predict the


likelihood of a patient developing a certain
disease or condition.
Application of Logistic Regression in…

• To know how GPA, CAT score, and


number of AP classes taken impact
the probability of getting admission
into a particular university.
Application of Logistic Regression in…

• Predicting customer churn


Application of Logistic Regression in…

• Hotel Booking: trying to predict either


user will cancel the booking or not.
Application of Logistic Regression in…

• More applications…
For Regression
Need of logistic over linear Regression ?
But what if the data contains an outlier? Things would become shambles.
For Probabilistic prediction (classification )
• 1.
Logistic regression – The math behind it

• Z = b0+b1X1 – If one IV

• Z = b0+b1X1 + b2X2 + b3X3 +… - For multiple IVs

• P = exp(z) / (1+exp(z))

• P = 1 / (1+exp(-z))

• For any values of X and b results in P in interval [0,1]


Logistic regression- odds function

• P = exp(z) / (1+exp(z))

• P = 1 / (1+exp(-z))

• Odds = probability of success Vs probability of failure = p/(1-p)


= exp(z)

• Log odds = z
Relationship between Probability, odds ratio
Relation ship between Probability, odds ratio and log of odds ratio.
One verses the another…
Odds and Log odds
Odds and Odds ratio – An medical example
Odds and Odds ratio – An medical example

The odds that a person having cough/cold, also has fever =

The odds that a person not having cough/cold, also has fever =

∴ The objective odds =

This shows that the likelihood that a person having cough/cold


also has fever is 21 times more likely than that of a person not
having cough/cold.
Basic requirement of LR
• DV – Should be binary
• IV – should be uncorrelated to each other
(multi-collinearity should be less)
• Large sample sizes are good for LR
• Threshold is required to establish the forecast
• Works well, when data is linearly separable.

• Limitations
• Sensitive to outliers
• Only significant features should be used to construct LOR
model, otherwise incorrect predictions will happen
Implementation

• 1. on excel with admission dataset


• (with various column adjust, significance of parameters,
Interpretations)

• 2. on excel with predicting customer churn

• 3. Python Implementation (Admission)


Implementation

• Python Implementation (Disease Prediction - Diabetes)


Activity Time- Graded quiz
Thank you

rushikesh.p@greatlakes.edu.in

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy