Model and Variable Selection

Free SOA Exam SRM (Statistics for Risk Modeling) lesson in Linear Models. 36 min read, ~5,344 words.

Choose the response distribution first (normal, Poisson, binomial, gamma), then pick the canonical link unless theory or fit says otherwise. t-tests target one coefficient; F-tests and likelihood ratio tests target nested-model comparisons. Use t for a single slope, F or LRT for blocks. AIC = -2 log L + 2k...

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