Metric Divergence Measures and Information Value in Credit Scoring

Table 3

Calculation of IV and WOE.

Age	Count	Tot. distr.	Goods	Distr. good	Bads	Distr. bad	WOE	WOE1
Missing	1000	2.5%	860	2.38%	140	3.65%	−0.42719	4.117875
18–22	4000	10%	3040	8.41%	960	25%	−0.10898	1.15268
23–26	6000	15%	4920	13.61%	1080	28.13	−0.72613	1.516347
27–29	9000	22.5%	8100	22.4%	900	23.44%	−0.04526	2.197225
30–35	10000	25%	9500	26.27%	500	13.02%	0.70196	2.944439
35–44	7000	17.5%	6800	18.81%	200	5.21%	1.28388	3.526361
44+	3000	7.5%	2940	8.13%	60	1.56%	1.64934	3.89182
Total	40000	100%	36160	100%	3840	100%

IV=0.6681, and √IV=0.8174.
L ₁ = 0.6684, L ₂ = 0.2987, and L _∞ = 0.1659.