Calculating odds-ratios
In the previous exercise, we saw how to compare the effects of a friend's recommendation on sales. However, regression outputs can be hard to describe and sometimes odds-ratios can be easier to use. Using the outputs from the previous exercise, we're going to calculate odds-ratios.
Refresher on odds-ratios:
- If an odds-ratio is 1.0, then both events have an equal chance of occurring. For example, if the odds-ratio for a friend's recommendation was 1.0, then a friend would have no influence on a purchase decision.
- If an odds-ratio is less than 1, then a friend's recommendation would decrease the chance of a purchase occurring. For example, an odds-ratio of 0.5 would mean a friend's recommendation has odds of 1:2 or 1 purchase occurring for every 2 passes.
- If an odds-ratio is greater than 1, then a friend's recommendation would increase the chance of a purchase occurring. For example, an odds-ratio of 3.0 would mean a friend's recommendation has odds of 3:1 or 3 purchases occurring for every 1 passes.
Note on course code: Since this course launched, the broom
package has dropped support for lme4::lmer()
models. If you try to repeat this on your own, you will need the broom.mixed
package, which is on cran.
This exercise is part of the course
Hierarchical and Mixed Effects Models in R
Exercise instructions
- Look at the
summary()
ofmodel_out
. - Extract the coefficients from
model_out
withfixef()
and then convert to an odds-ratio by taking exponential. Repeat withconfint()
to get the confidence intervals. - Calculate the confidence intervals and then exponentiate the effect of
friends
on a purchase usingtidy()
. Make sure to set theconf.int
andexponentiate
parameters.
Hands-on interactive exercise
Have a go at this exercise by completing this sample code.
# Run the code to see how to calculate odds ratios
summary( ___)
exp(___(model_out))
exp(___(model_out))
# Create the tidied output
tidy(model_out, conf.int = ___, exponentiate = ___)