Lift charts are the ways to understand the effectiveness of ranking of consumers or businesses. Take a look at the following lift chart.

(Double click on the lift chart to get better readable copy)

This lift chart can be enriched with the following

– False positive and true positive measurements

– KS statistic

– C measure and AROC (Area under the Receiver Operating Curve – Curve that is plot of False positives – Horizontal axis vs. True Positivies – Vertical Axis); C is the area under the ROC as a measure between (0.5,1) – since it is measure of area above the diagonal (which is considered the effect of random assignment) – this is the shaded area, plus the 0.5 area below the diagonal line shown below in this curve.

– The curve has a dramatic shift in tangent at the 4th decile and does that mean it is not applicable?

– Cumulative AROC, that is derived from the cumulative tabulation.