Population stability index

The Population stability index (PSI) is derived by computing observed and expected BAD rates for all the deciles. It is calculated as follows:

∑(Observed-Expected)*ln(⁡Observed/Expected)

The expected results are as follows:

·        No significant shift : < 0.1

·        Minor Shift : 0.1 to 0.25

·        Significant shift : > 0.25