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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.

For more information about this article, call Bruce Ratner at 516.791.3544,
1 800 DM STAT-1, or e-mail at