Preparing the Data for Analysis

Setting the random seed allows you to replicate the random selection of cases in this analysis.

  1. To set the random seed, from the menus choose:

    Transform > Random Number Generators...

    Figure 1. Random Number Generators dialog box
    Random Number Generators dialog box
  2. Select Set Starting Point.
  3. Select Fixed Value and type 9191972 as the value
  4. Click OK.
  5. To create the selection variable for validation, from the menus choose:

    Transform > Compute Variable...

    Figure 2. Compute Variable dialog box
    Compute Variable dialog box
  6. Type validate in the Target Variable text box.
  7. Type rv.bernoulli(0.7) in the Numeric Expression text box.

    This sets the values of validate to be randomly generated Bernoulli variates with probability parameter 0.7.

    You only intend to use validate with cases that could be used to create the model; that is, previous customers. However, there are 150 cases corresponding to potential customers in the data file.

  8. To perform the computation only for previous customers, click If.
    Figure 3. If Cases dialog box
    If Cases dialog box
  9. Select Include if case satisfies condition.
  10. Type MISSING(default) = 0 as the conditional expression.

    This ensures that validate is only computed for cases with non-missing values for default; that is, for customers who previously received loans.

  11. Click Continue.
  12. Click OK in the Compute Variable dialog box.

Approximately 70 percent of the customers previously given loans will have a validate value of 1. These customers will be used to create the model. The remaining customers who were previously given loans will be used to validate the model results.

Next