Model prioritization

Demystifying Decision Science

Howard Friedman

Adjunct Professor at Columbia University

Starting simple with linear regression

  • Effective for continuous outcomes when assumptions are met
  • 200+ years of proven usefulness in real-world analysis

Simplicity has power

  • Linear regression finds the best-fit line through your data
  • With transformations, it can model complex non-linear relationships too

Interpretability matters

  • Coefficients help with alignment
  • Quick to compute - easy to explain
     

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Demystifying Decision Science

Logistic regression

Many real-world problems involve binary or categorical predictions:

  • Fraud detection, churn prediction, and healthcare risk models

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Logistic regression is highly versatile

  • Suitable for binary outcomes, multiple categories, or even ordered outcomes

Probabilities support decision-making

Easy to interpret and implement

  • Coefficients show how each feature influences the outcome
  • Great as a baseline for more complex classifiers
Demystifying Decision Science

Feature transformations

Start with a strong baseline model

  • Build a functional version first, then assess the value of more advanced models

Feature transformations can boost performance

  • Transformations like log or square can increase variance explained
  • They can also improve how well your model fits the data

Match model assumptions to the data

  • Some models, like linear regression, perform best when residuals are normally distributed

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Demystifying Decision Science

Common transformations

 

  • Log and square root transformations compress wide ranges and reduce outlier impact
  • Standardization and normalization bring features to similar ranges, especially useful when units vary
  • Polynomial terms such as squared and cubic terms can represent complex, non-linear relationships with minimal effort

 

Use transformations to improve early models before jumping to complex ones

 

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Demystifying Decision Science

Let's practice!

Demystifying Decision Science

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