Bayesian variable selection for binary response models and direct marketing forecasting

Selecting good variables to build forecasting models is a major challenge for direct marketing given the increasing amount and variety of data. This study adopts the Bayesian variable selection (BVS) using informative priors to select variables for binary response models and forecasting for direct marketing. The variable sets by forward selection and BVS are applied to logistic regression and Bayesian networks. The results of validation using a holdout dataset and the entire dataset suggest that BVS improves the performance of the logistic regression model over the forward selection and full variable sets while Bayesian networks achieve better results using BVS. Thus, Bayesian variable selection can help to select variables and build accurate models using innovative forecasting methods. (C) 2010 Elsevier Ltd. All rights reserved.