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Board of Governors of the Federal Reserve System (U.S.)
International Finance Discussion Papers
Constructive data mining: modeling consumers' expenditure in Venezuela
Julia Campos
Neil R. Ericsson
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.


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Julia Campos & Neil R. Ericsson, Constructive data mining: modeling consumers' expenditure in Venezuela, Board of Governors of the Federal Reserve System (U.S.), International Finance Discussion Papers 663, 2000.
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Keywords: Consumption (Economics) ; Venezuela
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