5 Prediction

5.1 Big picture: data-driven decision-making

You have a set of possible actions you can take.

You have a prediction model or classification model that enables you to differentiate between cases, based on data.

Your decision model then enables you to discriminate — to make the “right” intervention for each different case, rather than just choosing the same action for all cases.

5.2 Predictive models

Predictive models may take many different forms.

• They may use many, many different types of data
• They may be built using different analytic techniques: statistical regression, machine learning,\(\ldots\)

We embrace this diversity of approaches.

But: we want our predictions to include uncertainty information.

So: want outputs in form of probability distributions over decision-state variables