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How to choose the Best Reference Group? Please Help, Thanks

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How to choose the Best Reference Group? Please Help, Thanks

Hi All,

Below is my Logistic Regression output results. I had a question, how to choose a group of reference? Does our choice of group of reference improve the model? For example in my case below, VAR1 has a negative Estimate, which means that customers in group(1,2,5,9,11,.) are less likely to respond. My group reference is the group that is more likely to respond. Is it better to keep the group that is more likely to respond as  a Group reference or shall I swap? Your help will be much appreciated.

Many Thanks

Analysis of Maximum Likelihood Estimates
Parameter DFEstimateStandardWaldPr > ChiSq
ErrorChi-Square
Intercept 1-6.9940.07798060.583<.0001
VAR11,2,5,9,11,.1-0.06450.020410.00470.0016
VAR2-2,2,1,810.25870.0222135.8357<.0001
VAR3<7145.510.20420.029547.89<.0001
VAR4784.5 To 894.5 or Miss1-0.25010.03551.186<.0001
VAR4<784.510.33760.0278147.6797<.0001
VAR51,.10.23850.027774.1201<.0001
VAR6<1106.510.36370.050951.01<.0001
VAR70,.10.10210.03578.17370.0043
VAR811,.1-0.30770.043150.8802<.0001
VAR83,4,7,810.1330.030319.2755<.0001
VAR89,10,12,131-0.0840.03535.64560.0175
VAR911-0.30080.087511.8110.0006
VAR92 or Miss10.12340.04148.89890.0029
VAR9310.09980.03886.63220.01
VAR100,.10.36950.04761.7212<.0001



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‎11-19-2013 01:01 PM
SAS Employee
Posts: 22

Re: How to choose the Best Reference Group? Please Help, Thanks

Good afternoon - in general, here are some things to keep in mind when choosing a reference group:

1.  sample size (you don't want your reference group to have a much smaller sample size in comparison to the non-reference group(s))

2.  the definition of the group: it should be a well-defined group (that is, not something like "other")

3. utility (maybe it is the control group, or the most important for some reason, etc.)

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‎11-19-2013 01:01 PM
SAS Employee
Posts: 22

Re: How to choose the Best Reference Group? Please Help, Thanks

Good afternoon - in general, here are some things to keep in mind when choosing a reference group:

1.  sample size (you don't want your reference group to have a much smaller sample size in comparison to the non-reference group(s))

2.  the definition of the group: it should be a well-defined group (that is, not something like "other")

3. utility (maybe it is the control group, or the most important for some reason, etc.)

Frequent Contributor
Posts: 95

Re: How to choose the Best Reference Group? Please Help, Thanks

Thank you Laura for your response...So the sign of the estimate doesn't matter then....What I mean, if the estime sign is negative, I shouldn't need to change the reference group and make the estimate positive...

SAS Employee
Posts: 22

Re: How to choose the Best Reference Group? Please Help, Thanks

You are welcome; I am glad it was helpful.

The sign of the estimate matters in that it tells you how that category changes the probability of success (or the probability of a particular level of the response).  The relationship between the level of the response for a given category is not going to change based on what level you select to be the reference group.  The perspective is all relative.

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