Conventional supervised statistical learning models aim to achieve high accuracy in predicting the value of an outcome measure based on a number of input measures. However, in many applications, some type of action is randomized on the observational units. This is the case, for example, in treatment=control settings, such as those usually encountered in marketing and clinical trial applications. In these situations, we may not necessarily be interested in predicting the outcome itself, but in estimating the expected change in the outcome as a result of the action. This is precisely the idea behind uplift models, which, despite their many practical applications, have received little attention in the literature. In this article, we extend the state-of-theart research in this area by proposing a new approach based on Random Forests. We perform carefully designed experiments using simple simulation models to illustrate some of the properties of the proposed method. In addition, we present evidence on a dataset pertaining to a large Canadian insurer on a customer retention case. The results confirm the effectiveness of the proposed method and show favorable performance relative to other existing uplift modeling approaches.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.