Interpreting conditional probability
You're analyzing data for a subscription-based company to predict whether a customer will cancel their subscription, also called churning. Initially, 10% of all customers churn. The company also tracks engagement behavior and finds:
Customer Behavior | Probability |
---|---|
Churn rate among low engagement customers | 40% |
Churn rate among high engagement customers | 5% |
A customer is flagged as low engagement. The probability for low engagement is 30%.
Using a Bayesian approach, how should you interpret this customer's churn risk now that you know engagement is low?
This exercise is part of the course
Advanced Probability: Uncertainty in Data
Hands-on interactive exercise
Turn theory into action with one of our interactive exercises
