CHAID for Specifying a Model
with Interaction Variables
Bruce Ratner, Ph. D.
In order to increase a model's predictive power beyond that provided by its components, data analysts create an interaction variable, which is the product of two or more component variables. However, a compelling case can be made for utilizing CHAID as an alternative method for specifying a model, thereby justifying the omission of the component variables under certain circumstances. Database marketing provides an excellent example for this alternative method. I illustrate the alternative method with a response model case study.
1 800 DM STAT-1, or e-mail at firstname.lastname@example.org.