In Example 2, the normal distribution means differ by two units, but the populations have the same variability and base rates. The utility of correctly identifying a Group 2 case is quite high with a utility estimate of 10. There is one cut-point of .85. Because of the high utility of correctly classifying Group 2 individuals, it’s in one’s interest to allow more Group 1 misclassifications. Classifying cases with scores less than .85 yields 97% correct classification for Group 2 and 56% correct classification accuracy for Group 1.
Example 2. One cut-point.
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