SmartEDA (version 0.3.10)

ExpInfoValue: Information value

Description

Provides information value for each categorical variable (X) against target variable (Y)

Usage

ExpInfoValue(X, Y, valueOfGood = NULL)

Value

Information value (iv) and Predictive power class

• information value

• predictive class

Arguments

X

Independent categorical variable.

Y

Binary response variable, it can take values of either 1 or 0.

valueOfGood

Value of Y that is used as reference category.

Details

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 - (Percentage of Good event - Percentage of Bad event) * WOE, where WOE is weight of evidence

• WOE - log(Percentage of Good event - Percentage of Bad event)

Here is what the values of IV mean according to Siddiqi (2006)

• If information value is < 0.03 then predictive power = "Not Predictive"

• If information value is 0.03 to 0.1 then predictive power = "Somewhat Predictive"

• If information value is 0.1 to 0.3 then predictive power = "Meidum Predictive"

• If information value is >0.3 then predictive power = "Highly Predictive"

Examples

X = mtcars$gear
Y = mtcars$am
ExpInfoValue(X,Y,valueOfGood = 1)