What Is a Randomized Controlled Trial? From Clinical Trials to Credit Policies

Randomized Controlled Trials (RCTs) are renowned as the gold standard in clinical trials, predominantly used to gauge the efficacy of new treatments. However, the applicability of RCTs extends far beyond merely clinical trials. In my line of work, we employ randomized experiments to evaluate the performance of varying credit underwriting and account management policies. While …

Revolutionizing Data Analytics with Text-to-SQL

A significant portion of a Data Analyst or Business Intelligence Analyst’s time is spent translating business questions into SQL queries. These analysts often serve as an interface between humans asking questions and the computers processing the data. In business settings, Software Engineers essentially act as translators, converting business requirements into executable code. With advancements in …

Markov Decision Process in Account Management of Consumer Lending

Recently, one of the main questions in my mind is how to adjust the user’s credit limit given a predicted risk. I consider myself a practitioner in the industry with limited experience. Currently, the account management process relies more on expert judgement. We may decrease the limit or freeze user accounts if they are not …

The Front and Back Door Adjustment Formula for Confounders

In fact, we have already seen the back-door adjustment when we discuss Simpson’s Paradox. We have calculated the weighted average of the rate of heart attacks with the drug in men and that in women to get the overall effect of the drug in the general population adjusted for the confounder, age. We can write …

Should You Switch Your Choice of Doors? The Month Hall Problem

I want to illustrate this problem using a causal diagram. Here is the rule of the game: Suppose you’re on a game show, and you’re given the choice of three doors. Behind one door is a car, behind the others, goats. You pick a door, say #1, and the host, who knows what’s behind the …

Cornfield’s inequality Causation v.s. Correlation

In the last post, I have shared about a debate: Today, I would like to show the proof on Corenfield’s Inequality, an inequality that settled the debate. I have read the original proof on the paper. Although the author said it is obvious, I don’t think so (always find reading maths discouraging LOL). I spent …