2.4. Odds and Odds Ratios
To appreciate the logit model, it’s helpful to have an understanding of odds and odds ratios. Most people regard probability as the “natural” way to quantify the chances that an event will occur. We automatically think in terms of numbers ranging from 0 to 1, with a 0 meaning that the event will certainly not occur, and a 1 meaning that the event certainly will occur. But there are other ways of representing the chances of event, one of which—the odds—has a nearly equal claim to being “natural.”
Widely used by professional gamblers, the odds of an event is the ratio of the expected number of times that an event will occur to the expected number of times it will not occur. An odds of 4 means we expect 4 times as many ...
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