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Area Under the Curve (AUC)

In simple terms, area under the curve (AUC) is a machine learning performance measurement represented literally by the area under the ROC curve–meaning the percentage of area that sits below the curve. “ROC curve” stands for receiver operating characteristic curve. This graphical plot illustrates the diagnostic ability of a binary classification system. In fraud prediction, the curve reveals how much a model can reduce false positives while increasing true positives and the tradeoffs between them.