Bad and Good Words Revisited

In a post the prospers.org forums, user havastat recommended looking at the listings for good and bad words, randomly dividing them, and seeing if they come out similarly. If they don't, there's a good chance that the findings were random. If they do, the findings are more likely to be relevant.

Percent Paid (By Loan): Is the percent of loans, containing the indicated word at least once, which finished with a status Paid.
Percent Paid (By Word): Is the percent of time that a loan ended with the status paid, weighted by the frequency of the word in the listing. (For example, a loan with a title "Help, help, help, help!" which did not pay would count four times more than a loan with "Help" listed only once.)
Word Count: The number of listings containing the word at least once. (Notably not the total number of times the word was used--the maximum here is once per listing.)

Like in the original posts, these are words from Prosper loans that were created before 2008. My methodology is at the bottom of the post, but loans were assigned to groups randomly and there were 8728 loans in each group.

Group 1 Worst Performing Words

Word	Percent Paid (By Loan)	Percent Paid (By Word)	Word Count
[average Paid]	61.1%
payday	38.9%	38.6%	596
behind	42.9%	43.6%	592
mother	43.5%	44.8%	566
chance	44.5%	42.1%	631
track	46.8%	45.6%	581
son	47.1%	44.8%	597
daughter	48.1%	46.3%	516
child	48.7%	47.9%	520
husband	49%	51.3%	896
single	49.5%	49.7%	707

Group 2 Worst Performing Words

Word	Percent Paid (By Loan)	Percent Paid (By Word)	Word Count
[average Paid]	59.6%
payday	37.5%	39.2%	595
behind	42.4%	41.3%	566
chance	43.5%	41.5%	575
son	45.7%	44.2%	514
mother	46.6%	46.7%	601
children	47%	45.6%	854
daughter	47.7%	44.6%	539
DELETED	47.7%	46.6%	507
child	47.8%	46.3%	552
30000	48.3%	47.6%	532

So, as with the original Words of Loss post, we see the word 'payday' at the bottom, with the words 'behind', 'chance' and then family words like 'mother', 'child', etc. to be on the bottom for both groups.


Now let's take a look at the best performing words:


Group 1 Best Performing Words

Word	Percent Paid (By Loan)	Percent Paid (By Word)	Word Count
[average Paid]	61.1%
tax	67.1%	66.7%	504
early	67.2%	67.7%	534
rate	67.6%	68.6%	1952
term	67.6%	66.6%	509
risk	67.8%	70.3%	565
fund	68.2%	70.2%	666
rates	68.3%	68.8%	609
lender	68.3%	70.2%	707
minimum	68.4%	68.4%	583
investment	69.1%	69.3%	679

Group 2 Best Performing Words

Word	Percent Paid (By Loan)	Percent Paid (By Word)	Word Count
[average Paid]	59.6%
risk	64.2%	66.1%	592
card	64.2%	65.9%	2910
higher	64.4%	63.2%	765
style	64.5%	58.8%	968
span	64.9%	59.5%	1069
don't	65%	64.3%	861
rate	65.2%	65.3%	1938
student	66%	66.3%	1078
lender	66.2%	67.5%	754
I've	66.2%	63.6%	888

It's interesting to see that lending words appear on both of these lists -- but there are fewer matches than the worst performing words. It looks like we've got 'risk', 'rate(s)' and 'lender' as matches but all of these are still much closer to the average paid than the worst performing words.

It could be that we will find that we can only tell if a loan is more likely to fail from the words that it uses, not that a loan is more likely to succeed.

Methodology:

Similar to the methodology I used in the previous two studies, I began with all Pre-2008 Prosper Loans.

I then placed all the loans in a random order and assigned them to Group 1 or Group 2 sequentially. From there I built a list of all the words in the title and body of the listing for those loans, tallying the number of times the word was used in each loan.

To come up with the Percent Paid (By Loan) I divided the number of loans with that word that finished with a status Paid by the number of loans with that word in total.