Is a man more likely to file a correct tax return than a woman

INSTRUCTIONS TO CANDIDATES

ANSWER ALL QUESTIONS

1. Create an initial logistic regression model to predict “Assessment” over the whole data. This initial model should include all independent variables EXCEPT “No”, “Fund company”, “Fund name” and “Reported by”. Manually apply backward stepwise selection to eliminate insignificant variables until all remaining variables have a P-value<0.05. (Note: Use the P-value displayed in the Effects Summary table.)  Save the final model script to data file. Which variables are selected in the end?

2. According to your final model, answer the following questions. You only need to answer Yes or No. (Hint: Be careful about the alphabetical order of “Correct” and “Incorrect”.)

(a) Are older people more likely to file a correct tax return?

(b) Is a man more likely to file a correct tax return than a woman?

(c) Is the tax payer whose fund was managed `Nowhere Asset Management' more likely to file a correct tax return than others?

(d) Is a “Simplified” form more likely to be correct than the “Complete” one? 

3. Use “Validation” column to partition the data into training set and validation set. Create a new final model as in step 1 with the target variable of Incorrect to answer the remaining questions.  Display the confusion matrix.  

What are the accuracy, precision and recall values of your model over validation set?

4. Generate the ROC curve.  Using the validation data set: What is the area under the curve?  Using the table from class, what is your assessment of it?

Save the script to data file.

 

 

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