Working Paper

Constructive data mining: modeling consumers' expenditure in Venezuela

Abstract: Hoover and Perez (1999) advocate a constructive approach to data mining. The current paper identifies four pejorative senses of data mining and shows how Hoover and Perez's approach counters each. To assess the benefits of constructive data mining, the current paper applies a data-mining algorithm similar to Hoover and Perez's to a dataset for Venezuelan consumers' expenditure. The selected model is economically sensible and statistically satisfactory; and it illustrates how data can be highly informative, even with relatively few observations. Limitations to algorithmically based data mining provide opportunities for the researcher to contribute value added in the empirical analysis.

Keywords: Consumption (Economics); Venezuela;

Bibliographic Information

Provider: Board of Governors of the Federal Reserve System (U.S.)

Part of Series: International Finance Discussion Papers

Publication Date: 2000

Number: 663