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What are two types of data in survival analysis?
In Survival Analysis there are two type of data: censored and uncensored. Censored data is when we do not know if the event happen during the observation period, while Uncensored data is when the time an event happen to the sample is observed. In case of motorbike retail, event of interest is when the motorbikes are sold:
What is the time to event in survival analysis?
The time to event in this case is defined as time till death. In the case of credit risk the event of interest is default. The major advantage of survival analysis compared to other credit scoring models, is that the model is capable of including censored and truncated data in the development sample.
How is survival analysis used in credit scoring?
In the recent years survival analysis has been introduced into credit scoring. Survival analysis is the area of statistics that deals with the analysis of lifetime data. The variable of interest is the time to event. This model tries to estimate the survival probability over the entire dataset.
What are the advantages of a survival analysis?
The variable of interest is the time to event. This model tries to estimate the survival probability over the entire dataset. The major advantage of survival analysis is the capability to incorporate censored data. For these observations no default is observed during the study period.
Last Update: Oct 2021
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