Instance-Level Costs for Nuanced Classifier Evaluation

We propose a unified algebraic framework for classification performance evaluation that encompasses binary, multiclass, multilabel, ordinal, hierarchical, cost-sensitive, and soft-label settings within a single formalism. The foundation is a representation of actual and predicted labels as binary indicator matrices, combined with three aggregation operators -- global, column-wise, and row-wise -- that correspond exactly to micro, macro/weighted, and exemplar averaging. Any binary performance measure expressed in terms of true/positive/negative counts extends automatically to all settings by substituting these operators, generating multiclass and multilabel versions without measure-specific derivations. The framework further accommodates soft classifier outputs via argmax or thresholding, soft ground truth via triangular norms, ordinal classification via membership functions or cumulative encodings, and cost-sensitive evaluation via a cost matrix that subsumes MAE and MSE as special cases. We establish several theoretical results: micro-averaging equals denominator-weighted macro-averaging; the product $t$-norm is the unique one preserving the confusion-matrix partition; skew-invariant measures are characterised as functions of recall and specificity; and micro-precision, micro-recall, and micro-$F_1$ are all equal to accuracy in multiclass settings. Empirical illustrations on synthetic and real data confirm the theoretical findings.

High-stakes decision systems in credit scoring, fraud detection, healthcare, and industrial safety require reliable uncertainty quantification under severe class imbalance and asymmetric error costs. Standard marginal conformal prediction (CP) provides valid overall coverage guarantees; however, we show that it severely under-covers rare, costly minority classes, with minority-class coverage dropping to as low as 0.5% on certain datasets. To characterize and address this limitation, we conduct a comprehensive benchmark comparing marginal CP, class-conditional (Mondrian) CP, and cost-controlled abstention mechanisms across 15 real-world imbalanced tabular datasets, 7 classification models, 3 probability calibration techniques, and 10 random seeds, resulting in 3,150 experimental runs. Our results show that Mondrian CP restores valid minority-class coverage, achieving an average minority-coverage improvement of 61.7 percentage points over marginal CP (p < 1e-80). Furthermore, combining Mondrian CP with cost-controlled abstention significantly reduces expected decision cost compared with standard decision boundaries, confidence-based rejectors, and risk-controlled rejectors under realistic human review budgets. We further quantify dataset-specific break-even thresholds at which deferring ambiguous instances to human experts becomes cost-effective. These findings provide practical guidance for deploying distribution-free, cost-aware uncertainty quantification in high-stakes decision support systems.

Human feedback can vary in cost and informativeness. Strong feedback can reveal severe errors but is costly, so cheaper quality ratings can help decide which items to annotate. We propose MICRO (Multi-Fidelity Impact Clustered Rollout), an active search framework that allocates a shared budget to these feedback types to maximise confirmed severe error discoveries. MICRO jointly models ratings and annotation losses conditional on item features to steer acquisition. It clusters acquisitions by their predicted impact on severity probabilities to select diverse candidates, then uses rollout to estimate their discovery value. Experiments on WMT20 English-German show that ratings improve both loss reconstruction and severity prediction. MICRO achieves the highest mean discovery count across four budget and rating cost settings, with similar performance to adapted MF-ENS in one and significant gains over all six comparison policies, including two rollout controls, in the other three $(p<.001)$.