A Discriminant Analysis Procedure for Loan Application using Ranked Data A Discriminant Analysis Procedure for Loan Application using Ranked Data

Abstract

Discriminant analysis is a multivariate techniques concerned with separating distinct sets of objects to previously defined groups. The procedure we intend to develop in this paper uses a less biased statistical technique than the conventional discriminant analysis and parallels to ranking procedure used by loan officers. A variety of univariate and multivariate statistical procedures as well as comprehensive validation methods are used to develop and test a best model. The resulting model obtains using SPSS, a statistical software to run the data, provides more accurate classification than other studies have shown, without violating assumption regarding discrimination.