This chart, from Evaluate Vantage, shows the difficulty of obtaining a high PPV† when the tested population has a low true-positive rate—arbitrarily set to 5% in this chart. Under such circumstances, a test with 95% specificity may have little or no practical utility insofar as it produces as many false-positive results as true-positive results—and even a test with 99% specificity produces a 16% false-positive rate.
*Negative Predictive Value: Probability that a negative test result is truly a negative subject.
†Positive Predictive Value: Probability that a positive test result is truly a positive subject.
(Note: The previous version of this post had incorrect definitions of NPV and PPV. h/t ‘valencay’ for noticing the error.)
“The efficient-market hypothesis may be the foremost piece of B.S. ever promulgated in any area of human knowledge!”