What do you mean by information value?
Value of information (VOI or VoI) is the amount a decision maker would be willing to pay for information prior to making a decision.
How does information value work?
Information Value analysis is a data exploration technique that helps determine which columns in a data set have predictive power or influence on the value of a specified dependent variable. IV is based on an analysis of each individual independent variable in turn without considering other predictor variables.
What is IV in data science?
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 information is valuable?
Every piece of information, public or not, has value to somebody: to other people, to companies and organizations, or to governments. They will use your information however benefits them, which may be contrary to your interests — and possibly even embarrassing or dangerous to you.
What are characteristics of information?
Characteristics of Information
- Availability/accessibility. Information should be easy to obtain or access.
- Accuracy. Information needs to be accurate enough for the use to which it is going to be put.
- Reliability or objectivity.
- Relevance/appropriateness.
- Completeness.
- Level of detail/conciseness.
- Presentation.
- Timing.
What is a good weight of evidence?
Each category (bin) should have at least 5% of the observations. Each category (bin) should be non-zero for both non-events and events. The WOE should be distinct for each category. Similar groups should be aggregated.
What is information value formula?
What is the No information rate?
The “no-information rate” is the largest proportion of the observed classes (there were more class 2 data than class 1 in this test set). A hypothesis test is also computed to evaluate whether the overall accuracy rate is greater than the rate of the largest class.
From Wikipedia, the free encyclopedia. Value of information (VOI or VoI) is the amount a decision maker would be willing to pay for information prior to making a decision.
What is WoE in logistic regression?
Weight of evidence (WOE) coding of a nominal or discrete variable is widely used when preparing predictors for usage in binary logistic regression models. When using WOE coding, an important preliminary step is binning of the levels of the predictor to achieve parsimony without giving up predictive power.
What is information and its importance?
The Needs & Importance of Information: Information is an aid in decision making, policy making needed for the policy makers, decision makers, managers etc. Information will have a reinforcing/ trans forming effect on human beings on receiving it.
What is information used for?
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 information and example?
The definition of information is news or knowledge received or given. An example of information is what’s given to someone who asks for background about something. Information is the summarization of data. Technically, data are raw facts and figures that are processed into information, such as summaries and totals.
What is information in your own words?
1a(1) : knowledge obtained from investigation, study, or instruction. (2) : intelligence, news. (3) : facts, data.
What is information and give an example?
Where does the idea of information value come from?
The roots of information value, I think, are in information theory proposed by Claude Shannon. The reason for my belief is the similarity information value has with a widely used concept of entropy in information theory. Chi Square value, an extensively used measure in statistics, is a good replacement for IV (information value).
Why is information value important in variable selection?
Information value is a very useful concept for variable selection during model building. The roots of information value, I think, are in information theory proposed by Claude Shannon. The reason for my belief is the similarity information value has with a widely used concept of entropy in information theory.
Which is a better measure of information value?
The reason for my belief is the similarity information value has with a widely used concept of entropy in information theory. Chi Square value, an extensively used measure in statistics, is a good replacement for IV (information value). However, IV is a popular and widely used measure in the industry.
How to value your information as an asset?
How do you quantify the value of information? You can start by using well-honed and established methods for valuing other kinds of assets. On the other hand, you may not (yet) be ready for, or interested, in financially valuing your information.
How to understand the value of your information?
For information of medium/long term value that is required to carry out or provide evidence of a business function or that is of historical value, you need to have the right policies, processes and systems in place to ensure that you can find, open, understand, trust and work with the information for as long as you need to.
How is the value of information manifested in society?
“The value of information is manifested in various contexts, including publishing practices, access to information, the commodification of personal information, and intellectual property laws (ACRL).” (7) What is the value of information in a democratic society?
Information value is a very useful concept for variable selection during model building. The roots of information value, I think, are in information theory proposed by Claude Shannon. The reason for my belief is the similarity information value has with a widely used concept of entropy in information theory.
When to use information value ( IV ) and weight of evidence?
This is a continuation of our banking case study for scorecards development. In this part, we will discuss information value (IV) and weight of evidence. These concepts are useful for variable selection while developing credit scorecards. We will also learn how to use weight of evidence (WOE) in logistic regression modeling.
