Everything else is ready: study the parts, the key terms and the quiz below.
Denominators, Base Rates and Missing Groups
Check whether the reported numerator and denominator refer to the population the claim is about.
In this lesson6 parts
- 01A rate needs a population
- 02Selection changes who can appear in a rate
- 03Count groups and derive approved-only rates
- 04The teacher audit reveals what the simulation concealed
- 05Missing categories and claims the report cannot make
- 06Reproduce the rate and test a new claim
Key terms
The words this lesson introduces, each in one line. The module’s glossary collects them all.
- source population
- The recorded cases a summary begins with: 30,000 existing clients.
- base rate
- Event fraction in a stated starting population: 6,636 / 30,000 = 22.12%.
- simulation (narration)
- An explicit teaching rule or process applied to data and labelled as such; here the screen
PAY_0 <= 0, not an actual lender rule. - selection
- A rule determining which source rows enter a reported subset.
- unobserved outcome
- A result absent under the decision being evaluated, such as a rejected applicant's default. It is not a zero.
- eligible denominator
- The cases allowed into the stated rate under its selection rule: the simulated approvals.
- group size, n
- The number of cases in a stated group.
- approval rate
- Approved count divided by the stated group considered by the rule.
- reported rate
- A numerator and denominator plus the rule defining who is included.
- teacher audit (narration)
- Revealing, in a labelled teaching step, outcomes that the simulated process hides and a real lender could never recover.
- population change
- A changed set of cases in a summary.
- denominator mismatch
- A numerator and denominator that refer to different eligible sets, such as 3,207 approved defaults over all 30,000 rows.
- missing outcome group
- Cases whose result cannot be observed under the stated process.
Quiz 5 questions
Your first pick on each question is the one that counts, and a right one earns a coin. Getting one wrong here is how the lesson sticks.
Practice
Problems to solve in your own notebook. Each states the problem, not the steps: working out the steps is the exercise. Level A applies the lesson, B combines it with earlier ones, C stretches it.
The self-checking notebook for this lesson is Denominators, base rates and missing groups.
Common mistakes
What you will see when it goes wrong, why it happens, and the fix.
Where it’s used
Where this lesson’s ideas turn up in real work.