Qini-based uplift regression

DOI10.1214/21-AOAS1465MaRDI QIDQ2247471zbMATH OpenOpenAlexFDO

Authors Mouloud Belbahri, Alejandro Murua, Olivier Gandouet, Vahid Partovi Nia

Publication date 17 November 2021

Published in The Annals of Applied Statistics (Search for Journal in Brave)

Full work available at URL https://arxiv.org/abs/1911.12474

causal inference derivative-free optimization Kendall's correlation Lasso logistic regression marketing

Ridge regression; shrinkage estimators (Lasso) (62J07) Generalized linear models (logistic models) (62J12) Applications of statistics to economics (62P20)

Abstract: Uplift models provide a solution to the problem of isolating the marketing effect of a campaign. For customer churn reduction, uplift models are used to identify the customers who are likely to respond positively to a retention activity only if targeted, and to avoid wasting resources on customers that are very likely to switch to another company. We introduce a Qini-based uplift regression model to analyze a large insurance company's retention marketing campaign. Our approach is based on logistic regression models. We show that a Qini-optimized uplift model acts as a regularizing factor for uplift, much as a penalized likelihood model does for regression. This results in interpretable parsimonious models with few relevant xplanatory variables. Our results show that performing Qini-based parameters estimation significantly improves the uplift models performance.

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