CHAID is a type of
decision tree technique, based upon adjusted significance testing (
Bonferroni testing). The technique was developed in
South Africa and was published in 1980 by Gordon V. Kass, who had completed a PhD thesis on this topic. CHAID can be used for prediction (in a similar fashion to
regression analysis, this version of CHAID being originally known as XAID) as well as classification, and for detection of interaction between variables. CHAID stands for
CHi-squared
Automatic
Interaction
Detection, based upon a formal extension of the US AID (Automatic Interaction Detection) and THAID (THeta Automatic Interaction Detection) procedures of the 1960s and 70s, which in turn were extensions of earlier research, including that performed in the UK in the 1950s.