The use of Fuzzy Decision Tree Analysis in Monitoring a Minimum Wage

Keith Whitfield Malcolm Beynon

No 101, Computing in Economics and Finance 2001 from Society for Computational Economics

Abstract: Effective monitoring of a minimum wage, requires that establishments potentially paying low wages are effectively identified. This paper investigates the identification of establishments paying low wages prior to the introduction of the British National Minimum Wage in 1999, through the utilization of fuzzy decision trees. Incorporating a fuzzy aspect within this problem (using membership functions) enables the judgements to be made with linguistic scales. An intelligent technique for constructing the required membership functions is introduced, which greatly reduces the necessity of any expert opinion within their construction. The Parzen windows method of estimating a probability distribution and the FUSINTER method of continuous variable discretisation are incorporated in this technique. An illustration of the utilization of the constructed fuzzy 'if ÷ then ÷' rules is included.

Keywords: FUSINTER; Fuzzy decision trees; Labour economics; Low pay; Membership functions; Parzen windows (search for similar items in EconPapers)
JEL-codes: C14 C44 J31 (search for similar items in EconPapers)
Date: 2001-04-01
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Persistent link: https://EconPapers.repec.org/RePEc:sce:scecf1:101

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