EconBase
← All papers

Binary Choice with Asymmetric Loss in a Data-Rich Environment: Theory and an Application to Racial Justice

Andrii Babii, Xi Chen, Eric Ghysels, Rohit Kumar

arXiv 16 Oct 2020 · Econometrics · publishedQuantitative Economics (2026) · 4 citations (OpenAlex)

arXiv:2010.08463 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We study the binary choice problem in a data-rich environment with asymmetric loss functions. The econometrics literature covers nonparametric binary choice problems but does not offer computationally attractive solutions in data-rich environments. The machine learning literature has many algorithms but is focused mostly on loss functions that are independent of covariates. We show that theoretically valid decisions on binary outcomes with general loss functions can be achieved via a very simple loss-based reweighting of the logistic regression or state-of-the-art machine learning techniques. We apply our analysis to racial justice in pretrial detention.

Citation extraction

90
references
139
in-text mentions
90
distinct cited
0
self-citations
20,387
main-text words

appendix boundary found by appendix_command · 70% of the source is main text. Read the extracted text to check this.

Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1G. Elliott and R. P. Lieli (2013) Predicting binary outcomes1.00063100%
2S. Boucheron, O. Bousquet, and G. Lugosi (2005) Theory of classification: A survey of some recent advances0.8434375%
3V. Koltchinskii (2011) Oracle Inequalities in Empirical Risk Minimization and Sparse Recovery Problems: Ecole d'Eté de Probabilités de Saint-Flour XXXV…0.84315660%
4M. H. Farrell, T. Liang, and S. Misra (2021) Deep neural networks for estimation and inference: Application to causal effects and other semiparametric estimands0.84333100%
5A. Rambachan, J. Kleinberg, J. Ludwig, and S. Mullainathan (2020) An economic approach to regulating algorithms0.81142100%
6J. Friedman, T. Hastie, R. Tibshirani, et al (2001) The elements of statistical learning, volume 10.7375260%
7J.-Y. Audibert and A. B. Tsybakov (2007) Fast learning rates for plug-in classifiers0.7373367%
8P. L. Bartlett, M. I. Jordan, and J. D. McAuliffe (2006) Convexity, classification, and risk bounds0.64422100%
9P. F. Christoffersen and F. X. Diebold (1996) Further results on forecasting and model selection under asymmetric loss0.64422100%
10P. F. Christoffersen and F. X. Diebold (1997) Optimal prediction under asymmetric loss0.64422100%

Showing the top 10 of 90 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Econometrics of Machine Learning Methods in Economic Forecasting0.58531
2High Dimensional Binary Choice Model with Unknown Heteroskedasticity or Instrumental Variables0.51121
3Constrained Classification and Policy Learning0.40511
4Managers versus Machines: Do Algorithms Replicate Human Intuition in Credit Ratings?0.40511
5Debiased Machine Learning of Aggregated Intersection Bounds and Other Causal Parameters0.40511
6Policy-Oriented Binary Classification: Improving (KD-)CART Final Splits for Subpopulation Targeting0.40511
7Root-$n$ Asymptotically Normal Maximum Score Estimation0.40511