Abstract
In this article, the performance of data mining and statistical techniques was empirically compared while varying the number of inde-
pendent variables, the types of independent variables, the number of classes of the independent variables, and the sample size. Our study
employed 60 simulated examples, with artificial neural networks and decision trees as the data mining techniques, and linear regression as
the statistical method. In the performance study, we use the RMSE value as the metric and come up with some additional findings: (i) for
continuous independent variables, a statistical technique (i.e., linear regression) was superior to data mining (i.e., decision tree and arti-
ficial neural network) regardless of the number of variables and the sample size; (ii) for continuous and categorical independent variables,
linear regression was best when the number of categorical variables was one, while the artificial neural network was superior when the
number of categorical variables was two or more; (iii) the artificial neural network performance improved faster than that of the other
methods as the number of classes of categorical variable increased.
2006 Elsevier Ltd. All rights reserved.