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We’ve got you covered when it comes to complex data analysis. When there’s a lot of information, it is time-consuming and not efficient to comb through hundreds of tables and charts to determine which variables are most interesting and illustrate the differences between the two groups.
The Population Stability Index (PSI) provides a score for each variable that takes into consideration both the raw difference and the relative distributional difference between the group of interest and the comparison group.
Why PSI? The approach surfaces not only which variables are most different between the two groups, but also how much different the variables are in comparison to each other.
We make it easy for you! Fill out the form to access an Excel and Tableau template that illustrates how to perform PSI scoring with sample data.
PSI at a Glance
The PSI formula might look like this:
PSI = Sum((GroupofInterest% – ComparisonGroup%) x LN(GroupofInterest%/ComparisonGroup%))
In the templates provided an example is shown providing 25 variables from thousands of credit card clients that have defaulted. Using the PSI statistic we can quickly see that variable Pay 2 had the largest distributional difference between the <$150k group and the $150k+group.
This approach saves time, makes clear what is most important and surfaces the relative importance of all the variables to one another.
A general rule of thumb is a PSI > 0.25 is a significant difference. Anything less than that isn’t significant.
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