1

I've been reading about risk ratios as typical measures in clinical settings. In the finance and credit literature, there is the weight of evidence (WoE) measure that is used to encode and study variables.

Is there a relationship between them? I read somewhere that the WoE is pretty much the log of the risk ratio, if you condition things properly, but I've been unable to prove that.

gung - Reinstate Monica
  • 132,789
  • 81
  • 357
  • 650
Guilherme Marthe
  • 1,249
  • 6
  • 12

1 Answers1

0

Weight of evidence (WoE) is used in different settings, but here I take it you mean the use by some in finance & risk modelling, see for instance this list of Qs. You can find your question answered here: Intuition behind Weight of Evidence and Information Value formula.

Then, the fast answer is: WoE is the logarithm of a specific risk ratio. The long answer is in the above link.

kjetil b halvorsen
  • 63,378
  • 26
  • 142
  • 467