IMF researchers: digital footprint yields better credit assessment • Hacker News Board

Re: IMF researchers: digital footprint yields better credit assessment

#121

Post by zajio1am » Sat, Feb 13, 2021, 2:01 PM UTC

pmichaud wrote: post #25

thegrimmest wrote: post #17

Earlier quoted context omitted.

If these sources of data are actually more accurate predictors of creditworthiness, then shouln't we be applauding their use? If it so happens that tall people are less likely to repay loans, why is it wrong to charge tall people higher interest? Otherwise aren't we just socializing the cost imposed by artificially fuzzy criteria?

When I have this conversation with myself, here's what I come up with: Shouldn't we be allowed to everything into account when determining credit worthiness? Even if it's socially uncomfortable? We get locally more accurate pricing / risk assessment that way, but we also create feedback loops that we as a society have decided we want to not contribute to. The cost for this is the pricing inaccuracy which we collectiv…

> So, I don't think you're wrong, but maybe consider if what we're socializing the cost of is worth the price?

But you do not socialize the cost, you just move it on someone else.

For example, we have two people A, B, with risk-assessing algorithm risk1 gives risk1(A) = 3.3, risk1(B) = 2.9. Risk limit for creditors is 3, so person A would not get credit.

But risk1() uses same forbidden information, so we use instead less informed risk2() that got risk2(A) = 2.9, while risk2(B) = 3.1, so now person A would get credit, but person B would not.

Re: IMF researchers: digital footprint yields better credit assessment

#122

Post by tryptophan » Sat, Feb 13, 2021, 2:12 PM UTC

zaptheimpaler wrote: post #112

thegrimmest wrote: post #42

Earlier quoted context omitted.

A lot to unpack here, let me try. Are machine learning algorythms capable of stereotyping people? How accurate does a stereotype have to be before it's a useful predictor? If these models lead to good data, then what's wrong with them? If people who follow the NBA do in fact default on their loans more, shouldn't they pay higher interest? I agree that the healthy should not be compelled to subsidize the costs of heal…

Have you considered the logical endpoint of your line of reasoning? Basically, loans should only be given to those who are 99% likely to pay them back. Anyone who is at risk of default, say because they lost their job should be denied, making a permanent descent into poverty and misery even more likely. Health insurance should only be given to those who are already healthy. Anyone who is sick enough to significantly…

The purpose of risk assessment isn't to only give loans/insurance to 0 risk people. It's to quantify the level of risk.

Once you know the level of risk you can then give loans, adjusting the interest rate to make up for the risk. By hiding information from lenders, you actually make them less likely to give a loan, rather than more likely. An unknown level of risk is 100x worse than a known high level of risk.

Re: IMF researchers: digital footprint yields better credit assessment

#123

Post by swiley » Sat, Feb 13, 2021, 2:29 PM UTC

Yikes. It won't be long before there's serious economic incentive to exclusively browsing the web by just running curl with TOR.

Re: IMF researchers: digital footprint yields better credit assessment

#124

Post by swiley » Sat, Feb 13, 2021, 2:32 PM UTC

thegrimmest wrote: post #17

hn_throwaway_99 wrote: post #15

I hope that regulatory agencies start cracking down on these "alternative sources" for credit-worthiness data. Researchers have shown how it's very easy to attribute things like political party, race, sexuality, etc., things that are often illegal to take into consideration when determining credit, to other things like where you live, TV shows you like, apps you have on your phone, etc. And strangely (or not) this bl…

If these sources of data are actually more accurate predictors of creditworthiness, then shouln't we be applauding their use? If it so happens that tall people are less likely to repay loans, why is it wrong to charge tall people higher interest? Otherwise aren't we just socializing the cost imposed by artificially fuzzy criteria?

This is a great idea if you'd like to continue down our current path of creating a large group of disenfranchised people who think violent revolution is the only way to get out of their current situation.

Re: IMF researchers: digital footprint yields better credit assessment

#125

Post by thegrimmest » Sat, Feb 13, 2021, 2:36 PM UTC

throwaway189262 wrote: post #93

thegrimmest wrote: post #44

Earlier quoted context omitted.

Well, I personally haven't consented to socializing the cost of anything. I'm not sure what the ethical grounds are for imposing this on me, and in so doing dilluting available accuracy of data about people. These feedback loops you're referring to, what order are you proposing for your chicken and your egg? What's causing what in your view?

> Well, I personally haven't consented to socializing the cost of anything. This is a strange take. If you had to "consent" to laws there would be utter chaos. The places where you can pick and choose which laws apply to you have no real laws. And all of those places are dangerous and destitute. That's why laws are decided by the majority, there will always be dissenters for every law out there. Some harmless, but ot…

Here we arrive at the concept of negative and positive rights. You don't have to consent to be subject to laws that bar you from interfering with others. You should have to consent before being forced to provide others with goods and services on the benefit of your labour.

Re: IMF researchers: digital footprint yields better credit assessment

#126

Post by thegrimmest » Sat, Feb 13, 2021, 2:49 PM UTC

zaptheimpaler wrote: post #112

thegrimmest wrote: post #42

Earlier quoted context omitted.

A lot to unpack here, let me try. Are machine learning algorythms capable of stereotyping people? How accurate does a stereotype have to be before it's a useful predictor? If these models lead to good data, then what's wrong with them? If people who follow the NBA do in fact default on their loans more, shouldn't they pay higher interest? I agree that the healthy should not be compelled to subsidize the costs of heal…

Have you considered the logical endpoint of your line of reasoning? Basically, loans should only be given to those who are 99% likely to pay them back. Anyone who is at risk of default, say because they lost their job should be denied, making a permanent descent into poverty and misery even more likely. Health insurance should only be given to those who are already healthy. Anyone who is sick enough to significantly…

> Have you considered the logical endpoint of your line of reasoning?

In fact I have. In my estimation, if we adopted a model of interaction that emphasizes consent, the incapable and unfortunate among us would rely on charity to have their needs met, as they have for most of history. This seems much more ethical than to rely on force through taxation. It can't be compassionate to impose your idea of compassion onto other unwilling people.

It is also worth noting that as long as we consume goods made by people in conditions we don't tolerate domestically, we're being wildly hypocritical. All we've done is offshore the suffering, and in the process massively harm the environment shipping things to and from more lenient jurisdictions.

> In a world that worked so hard over centuries to create modern healthcare, we should only use it for people who barely need it. We may have literally figured out how to transplant organs and save lives, but nah its too expensive so why bother?

It should be reserved for those who can afford to pay for it. If you want a modern operating theatre, filled with expensive equipent and highly educated people, someone has to pay for it regardless of whether it's for yourself or for your horse. I'm only saying that the person who pays should do so consensually.

Likewise, if all you can afford is a street dentist with rusty tools, then I don't see from where one derives entitlement to anything else. As mentioned earlier, we already buy things made by people who live in such conditions, so the point is moot.

> Anyways, your worldview is fucked. Hope you think much more deeply about it. Or just grow old in the world you wish for, maybe one day you will need surgery, insurance will reject you, banks will not loan you the $200k it costs, and you will die for the sake of the algorithms and profit maximization.

This all may be, but I will be dying with my dignity intact, not greedily reaching into the pocket of a stranger, deluded into thinking I'm entitled to what's inside.

Re: IMF researchers: digital footprint yields better credit assessment

#127

Post by thegrimmest » Sat, Feb 13, 2021, 2:57 PM UTC

aneemzic wrote: post #71

thegrimmest wrote: post #49

Earlier quoted context omitted.

The point is that these algorythms do study your behaviour and correlate it with the behaviour of others. These predictions don't have to be 100% accurate to be useful. What's wrong with 70% of tall people benefiting from being associated with the other 30%? This only lasts until someone figures out how they are different and breaks the association right?

> This only lasts until someone figures out how they are different and breaks the association right? Would you be OK if banks started charging you 4% more interest because say you have irish heritage? Your behaviour hasn't changed and nobody can explain why it matters that your father was irish, but the models determined it's statistically significant, What if at some point 30 years down the line it's determined it w…

To feel that there's something wrong with it, I would first have to feel entitled to credit, which I don't. Why do you?

Re: IMF researchers: digital footprint yields better credit assessment

#128

Post by Cederfjard » Sat, Feb 13, 2021, 2:57 PM UTC

swiley wrote: post #123

Yikes. It won't be long before there's serious economic incentive to exclusively browsing the web by just running curl with TOR.

Unless it means you won’t get credit.

Edit: Like how apparently not having any social media accounts can weigh against you, if asked to produce them, when attempting to enter certain countries.

Re: IMF researchers: digital footprint yields better credit assessment

#129

Post by thegrimmest » Sat, Feb 13, 2021, 3:02 PM UTC

throwaway189262 wrote: post #87

thegrimmest wrote: post #42

Earlier quoted context omitted.

A lot to unpack here, let me try. Are machine learning algorythms capable of stereotyping people? How accurate does a stereotype have to be before it's a useful predictor? If these models lead to good data, then what's wrong with them? If people who follow the NBA do in fact default on their loans more, shouldn't they pay higher interest? I agree that the healthy should not be compelled to subsidize the costs of heal…

> I agree that the healthy should not be compelled to subsidize the costs of healthcare for the unhealthy. Can you tell me why it's ethical to force my compliance? Because it makes health insurance impossible to get when you need it most. It makes health insurance a scam because any serious illness and your company will fire you and you won't be able to get any other insurance. Insurance becomes cheap because it's us…

My argument is that all human interactions should be consensual. Slavery is clearly and obviously out of the questions. Discrimination is the act of making choices, you do it every time you order something to eat. I do belive people should be able to make whatever choices in personal and professional association they please, without anyone trying to peek into their heads and guess at their intentions.

I strongly beleive in caring for the poor and the sick. That is one of the oldest definitions of the virtue of charity. I am wholly against imposing my own personal virtues on other people though. Why are you so comfortable doing so?

Re: IMF researchers: digital footprint yields better credit assessment

#130

Post by swiley » Sat, Feb 13, 2021, 3:03 PM UTC

Cederfjard wrote: post #128

swiley wrote: post #123

Yikes. It won't be long before there's serious economic incentive to exclusively browsing the web by just running curl with TOR.

Unless it means you won’t get credit. Edit: Like how apparently not having any social media accounts can weigh against you, if asked to produce them, when attempting to enter certain countries.

Honestly credit is completely overrated. You can rent apartments for example even if you've never owned a credit card or taken out loans provided you have a job and can prove it. People just want to know you have the ability to pay them and behavior is a really stupid way to judge that.