Notes

The WoE recoding of predictors is particularly well suited for subsequent modeling using Logistic Regression. Specifically, logistic regression fits a linear regression equation of predictors (or WoE- coded continuous predictors) to predict the logit-transformed binary Goods/Bads dependent or Y variable. Therefore, by using WoE-coded predictors in logistic regression, the predictors are all prepared and coded to the same WoE scale, and the parameters in the linear logistic regression equation can be directly compared, for example, when using the new modeling tools for Marginal Stepwise Logistic Regression.