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A Note on the Comparison of Logit and Discriminant Models of Consumer Credit Behavior

Published online by Cambridge University Press:  06 April 2009

John C. Wiginton
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Extract

Since the early work of Durand (1941), there has been considerable interest in using quantitative models of consumer credit behavior for credit-granting decisions. Most models are based on the concept of “scoring” by use of weights usually determined as statistically significant coefficients of some linear statistical model, frequently the linear discriminant model. It is the purpose of this note, however, to propose maximum likelihood estimation of the logit model as an alternative, and to compare the two models in a “scoring experiment.”

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 15 , Issue 3 , September 1980 , pp. 757 - 770
Copyright
Copyright © School of Business Administration, University of Washington 1980

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