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I have two questions regarding severe penalties and randomly selected applications:

1. Occurrence of severe penalties (B3, B4, B5, B6, B16, BGK, C16, JLP3, V5) has dropped drastically from 2015 to 2016 and 2017 (Penalties in general has also decreased from 2015). Below table gives the numbers for severe penalties.

Case-year Number of applications Number of applications with severe penalty Event Rate
2015                                     14,750                                                                                  1,189 8.1%
2016                                     14,552                                                                                      171 1.2%
2017                                     14,507                                                                                      291 2.0%
What could be the possible reason for such a drop? 

2. We see that some applications have selected_random and selected_risk both populated as "1". Below given are the numbers for such applications:

2015             594
2016             547
2017             509
Total          1,650

Why are these applications selected randomly as well as on the basis of risk factor? 


  • 1. It may be insightful to see if a specific type of penalty is more present in 2015. Could you provide your statistics (number of applications) on the level of individual codes?

    2. The selection process is quite involved, for instance, an applicant may be selected by risk assessment for another type of subsidy (other than direct payment), and then an inspection is carried out jointly for many of her applications. For the sake of answering the business questions, you can consider these applications to be inspected due to risk assessment.
  • Addtition for 1): I just had a look at the question description and noticed that BGP, BGKV and B5F are also "severe". Sorry for this, I will ask for an update of the description.
  • Given below is the table for number of applications on the level of individual penalty where no. of applications is more in 2015:
    Case-year 2015 2016 2017
    Case.penalty_B2         7,967          2,058          1,502
    Case.penalty_B3            805                 -                   -  
    Case.penalty_B4            191                 -                   -  
    Case.penalty_B6            123                 -                   -  
    Case.penalty_B16            111                 -                   -  

    Also, BGP, B5F and BGKV penalties have zero applications in 2015 and 2016. Given below is a table for this:

    Case-year 2015 2016 2017
    Case.penalty_B5F                -                  -                   9
    Case.penalty_BGKV                -                  -                 15
    Case.penalty_BGP                -                  -              372

    Were these penalties introduced in 2017? 

  • One reason for the drop in severe penalties could be that new entitlements have been handed out in 2015, which could be a source of more erroneous applications.

    It is also possible that new penalty codes are introduced while others are not in use anymore. The 3 codes you listed were indeed introduced in 2017.
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