Competing Risks
The opening lines to Leo Tolstoy’s classic novel Anna Karenina are often translated as: “All happy families are alike; each unhappy family is unhappy in its own way.” This book is not about Russian literature, but what Tolstoy wrote in the 19th century about families is also true of customers in the 21st century. Happy customers who stay are all alike because they remain customers. Unhappy customers stop, and they do so for a variety of reasons. Although perhaps not as compelling as the family tragedies in a Tolstoy novel, these different reasons are of analytic interest. Competing risks is the part of survival analysis that quantifies the effects of these different reasons.
Examples of Competing Risks
One way to think about competing risks is to imagine a guardian angel “competing” with various devils of temptation for each customer. The guardian angel encourages each customer to remain happy, loyal, and paying. The various devils of...