Incorporating Confidence Intervals on the Decision Threshold in Logistic Regression

This paper discusses an application of confidence intervals to the threshold decision value used in logistic regres]sion and discusses its effect on changing the quantification of false positive and false negative errors. In doing this a grey area, in which observations are not classified as success (1) or failure (0), but rather ‘uncertain’ is developed. The size of this grey area is related to the level of confidence chosen to create the interval around the threshold as well as the quality of logistic regression model fit. This method shows that potential errors may be mitigated. Monte Carlo simulation and an experimental design approach are used to study the relationship between a number of responses relating to classification of observations and the following factors: threshold level, confidence level, noise in the data, and number of observations collected. Copyright © 2015 John Wiley & Sons, Ltd.