Population Stability Index in Machine learning models

Population Stability Index is a statistical measure commonly used in credit risk modeling and other fields to assess the stability of a population across different time periods or segments. It's particularly valuable in scenarios where changes in the population distribution could impact the effectiveness of a model. It is a fundamental assumption that the population on which a statistical model is applied to is similar to the population on which the model is developed at.

If this happens, then a decision must be made towards the recalibration or redevelopment of the model. Before we dive deep into the PSI mathematical expression, we start with some key concepts on Entropy and KL divergence. X Entropy and KL Divergence Entropy and KL Divergence Entropy and KL Divergence Entropy is a measure of uncertainty or randomness in a set of data.

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