Figure 2: One-way threshold analysis from regression results.

The standardized values of x_j are plotted on the X axis, and the NHB is plotted on the Y axis. The horizontal line (−Δθ₀) is equal to the negative expected value of the incremental NHB. The grayed out region represents the values of the standardized parameter z_j at which the preferred decision is reversed. $z_j^{*}$ is the value at which the decision changes and it is a function of the intercept (θ₀) and (θ_j), the coefficient of z_j, in the incremental NHB (ΔNHB) regression. The region of z_j where T₁ is preferred over T₀ is conditional on the direction of Δθ_j which indicates the direction in which ΔNHB changes relative to z_j. If Δθ_j > 0, meaning that ΔNHB increases as z_j increases, then T₁ becomes preferred over T₀ where $z_j>z_j^{*}$. However, if Δθ_j is a negative value, then T₁ must be preferred over T₀ in regions where $z_j<z_j^{*}$.