Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
481833 | European Journal of Operational Research | 2007 | 13 Pages |
Abstract
The paper presents the first empirical investigation of the relationship between present value of net revenue from a revolving credit account and times to default and to second purchase. The analysis is based on the data for a store card which is used to buy ‘white’ durable goods in Germany. It is demonstrated that there exists a relationship between the above given measures. It appears that there is a scope for improving profit if an application for a store card is assessed by using a model which estimates the revenue and includes the survival probability of default and the survival probability of second purchase (a survival combination model) rather than merely a static probability of default predicted by a logistic regression.
Related Topics
Physical Sciences and Engineering
Computer Science
Computer Science (General)
Authors
Galina Andreeva, Jake Ansell, Jonathan Crook,