CHAID. Example: Opening of Cinema/ Children’s Park/Exhibition Center. To find consumer responses to opening of Cinema, Children’s park or Exhibition 903 respondents were asked to rate each alternative on a 5 point scale: 1(v.low) to 5 (v.high)
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Gender: Male (1), Female (2)
Age: 16-20 (1)
Socio-economic group had 6 categories:A(1), B(2), C1(3), C2(4) etc
1. Indicate indep. var. that most affect dep. var.
2. Identify mkt. segments that differ most on these important. indep. var.
1. First select indep. var. whose subgroups differ most w.r.t dep. var.
2. Each subgroup of this var. is further divided into subgroups on remaining variables
3. These subgroups are tested for differences on dep. var.
4. Var. with greatest difference is selected next
5. Continue until subgroups are too small
1. Designate dep. and indep. Variables
2. Each indep. var. divided into categories
3. Split population into 2 groups on “best”indep. var.
4. Further dichotomize each of these groups successively
5. Continue splitting each resulting subgroups until no indep. var. meets selection criteria
1. Not a classical statistical model
2. Hypothesis and inference tests not possible
3. Multivariable not multivariate procedure. All variables are not considered simultaneously
4. Does not adjust for fact that there are many ways to dichotomize indep. variable
1. All var. dep. or indep. can be categorical
2. CHAID selects indep. var. using Chi- square test.
3. CHAID not restricted to binary splits
4. Solves problem of simultaneous inference using Bonferroni multiplier
5. Automatically tests for and merges pairs of homogenous categories in indep. var.
1. A categorical dep. var.
2. A set of categorical indep. variables
3. Settings for various CHAID parameters
4. Analyze subgroups and identify “best” indep. var.