Econometrics and Data Science: Apply Data Science Techniques to Model Complex Problems and Implement Solutions for Economic Problems

© The Author(s), under exclusive license to APress Media, LLC, part of Springer Nature 2022

T. C. NokeriEconometrics and Data Sciencehttps://doi.org/10.1007/978-1-4842-7434-7_5

5. Classifying Economic Data Applying Logistic Regression

Tshepo Chris Nokeri¹  

(1)

Pretoria, South Africa

 

This chapter applies logistic regression to investigate the nature of the relationship between variables when the response variable is a category (meaning it’s limited to only a few classes). This model is the most common non-linear model and it’s often called classification. It uses a Sigmoid function to model the data.

Figure 5-1 demonstrates that the classifier operates on a predictor variable to generate a binary output value. Equation 5-1 shows the sigmoid equation. ...