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Overparameterized models: Regularization, priors and Bayesian inference

At this point we have seen that models can be too complicated, but thus far complexity has roughly meant the number of parameters (regression coefficients). Striking a balance between bias and variance means finding the right number of predictors to include, but there are ways to build highly flexibly models which do not overfit.

Material:

Concepts

Regularization for regression models, Priors, Laplace rule of succession, Bayes rule, posterior distributions, how priors influence the posterior for simple models, connection between regularization and priors.

What you need to know

  • How to select and justify priors (using Normal probabilities or lognormal)
  • For estimating the sample mean, be able to calculate the influence of a given regularization of the least squares estimator by hand
  • Implement regularization in Python and have back of the envelope idea of the effects on regression coefficients.
  • Be able to translate priors to regularization for ridge regression (and vice versa)

Wikipedia References