Segmentation model with respect to the difference in means
Marcin Owczarczuk
No 16, Working Papers from Department of Applied Econometrics, Warsaw School of Economics
Abstract:
The aim of the paper is to formulate and solve the following segmentation problem. Given is a population described by independent variables: X1, ... , Xn, (both continuous and categorical), the continuous dependent variable Y and the two-level categorical variable $\alpha$ with levels $\alpha = 1$ and $\alpha = 0$. $\bar{Y}_{\alpha=1}$ and $\bar{Y}_{\alpha=0}$ are the means of $Y$ for observations at levels $\alpha=1$ and $\alpha=0$, respectively. The goal is to create the segments of the population, described by the independent variables, that the difference in means $\bar{Y}_{\alpha=1}-\bar{Y}_{\alpha=0}$ is the feature that distinguishes the segments. I. e. the means should be as different as possible between segments and should be similar within the segment. The solution is based on regression trees approach.
Keywords: ANOVA; regression trees; segmentation (search for similar items in EconPapers)
JEL-codes: C21 C44 M31 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2006-05-22
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