# Rare event logistic regression bias correction

In King and Zheng's paper: http://gking.harvard.edu/files/gking/files/0s.pdf

They mention about $\tau$ and $\bar{y}$. I already have data with 90000 0's and 450 1's. I have already fitted a logistic regression with the whole data and want to make a prior correction on the intercept.

Or should it be that I take about 3000 0's and 450 1's and then run logistic regression and then apply the prior correction on intercept? would then $\tau$ = 450/90450 and $\bar{y}$ = 450/3450?

Edit Based on answer from Scortchi

I am trying to predict probability of a matchmaking happening. A match might be happening between a buyer and seller, two possible individuals in a dating site, or a job seeker and prospective employee. A 1 is when a match happens, zero for all other pair-wise interactions that have been recorded. I have real life data from one of these use cases. As said before, the rate of 1's in the data is very small (=450/(450+90000). I want to build a logistic regression model with correction from King et.al.

The data I have can be presumed to be all possible data i.e. it is the whole universe. I would presume the rate of 1's in the universe would be 450/(450 + 90000).

I want to sample all the 1's (450 of them) and a random 3000 0's from this data universe. This would be sampling based on 1's. Once the logistic regression is built on this, I want to make a bias correction.

Is it right to presume here that $\tau$ = 450/(450 + 90000) and $\bar{y}$ = 450/(450+3000)?

I am arguing that $\tau$ is indeed the universe estimates because for my use case I pretty much have all the target population data. My question is, with the current setup of the problem how would $\tau$ and $\bar{y}$ be defined? Running time is not the issue, but how to make the bias correction for a rare event is the issue.

They define $\tau$ & $\bar{y}$ too: $\tau$ is the fraction of 1's in the population; $\bar{y}$ is the observed fraction of 1's in the sample (based on prior information).
You'd typically use prior correction when you've sampled based on the outcome; which I'd guess you haven't here. But if you have, then $\bar{y}=\frac{450}{90450}$ & you need to know or estimate $\tau$ in some other way.
• Thanks a lot for your answer. I have updated my question because I think it wasn't completely clear. Would you still argue that $\bar{y}$ is what you have defined and $\tau$ would be something I would have to get from the researcher? – user1971988 Jun 4 '14 at 5:58