Chapter 20

Coding for Predictive Modeling


20.1 Introduction

20.2 Proportions or Means of the Target Variable

20.3 Interval Variables and Predictive Modeling

20.4 Validation Methods

20.5 Conclusion


20.1  Introduction

20.1.1  The Scope of This Chapter

Many data mining analyses deal with predictive modeling tasks. Either the occurrence of an event or a value has to be predicted. Examples of predictive modeling business questions include the prediction of a contract cancellation, the delinquency of a customer’s loan, or the claim amount for an insurance customer.

Data mining analysis not only starts with the creation of a predictive model, it also deals with creating and preparing meaningful derived variables. In earlier chapters we saw a ...

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