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A Flexible Tool for Model Building: the Relevant Transformation of the Inputs Network Approach (RETINA)*
Author(s) -
PerezAmaral Teodosio,
Gallo Giampiero M.,
White Halbert
Publication year - 2003
Publication title -
oxford bulletin of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0305-9049
DOI - 10.1046/j.0305-9049.2003.00096.x
Subject(s) - flexibility (engineering) , transformation (genetics) , computer science , range (aeronautics) , simplicity , process (computing) , sample (material) , nonlinear system , data mining , mathematics , statistics , engineering , biochemistry , chemistry , philosophy , physics , epistemology , chromatography , quantum mechanics , gene , aerospace engineering , operating system
A new method, called Relevant Transformation of the Inputs Network Approach is proposed as a tool for model building. It is designed around flexibility (with nonlinear transformations of the predictors of interest), selective search within the range of possible models, out‐of‐sample forecasting ability and computational simplicity. In tests on simulated data, it shows both a high rate of successful retrieval of the data generating process, which increases with the sample size and a good performance relative to other alternative procedures. A telephone service demand model is built to show how the procedure applies on real data.