I am developing a prediction model with a logistic regression by using SAS Enterprise Miner. The original sample (N=342) only has 16 target “1” category, which corresponds to 4,7% (16/342) of the observations. To handle the imbalanced sample and the rare events issue, at the sample general property panel, for the level based option I set sample proportion as 50.0. Hence I end up with a sample containing 32 observations (16 observations for target “1” category and 16 observations for the target “0” category), which I used to developed the prediction model.

However my PhD Adviser is concern because “the occurrence probability from the scoring is not the one that predicts correctly for the original distribution, it is the one that predicts correctly for the oversampled set”. For my PhD thesis stand point of view, I must provide references that this methodology “oversampling” approach is legible.

I really appreciate if you could help me to address the issue of imbalanced sample and its rare events. If possible, could you suggest me any references in order to prove that this approach is legible and accepted by the Statisticians community?

Thank you so much for your kind cooperation.