Understanding costs in practice

We need to understand the various types of costs involved while creating weights for different classes. These costs change on a case-by-case basis. Let’s discuss an example of cost calculations to understand what we should consider while thinking about cost calculations.

Let’s take the example of pediatric pneumonia. According to UNICEF, a child dies of pneumonia every 43 seconds [4]. Imagine we are creating a new test for pediatric pneumonia – how will we decide the cost of different errors?

Let’s review the confusion matrix from Table 5.1. There will usually be no extra cost for True Negatives and True Positives. But using a False Negative – that is, when a child has pneumonia and predicting the child to be healthy – will have a very high cost. On the flip side, when a healthy child is predicted as being affected by pneumonia, there will be a cost associated with the troubles the family of the child may...