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Modeling a Distribution with a Mass at Zero
Bruce Ratner, Ph.D.

The standard approach for modeling a continuous target variable is the ordinary least-squares (OLS) regression model. One of the assumptions of OLS regression is that the target variable is basically continuous with permissible discontinuities and minor clumping at several values, including the value zero. If there is a major mass at the value zero, then OLS regression renders at best questionable results, or the floccinaucinihilipilification (estimating as worthless)  of the analysis itself. The purpose of this article is to present a flexible modeling approach for modeling a continuous target variable with a major mass at zero, a situation quite common in database marketing. I illustrate the modeling approach using direct marketing data.

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