Question

What is another name for the type of insight that examines how one variable explains variation of the outcome variable?

(A) ​​​​​​​First-order analysis
(B) Second-order analysis
(C) Third-order analysis
(D) Spectrum analysis
(E) Object-oriented analysis

Answer 1

(A) First-order analysis

Explanation:

Variance based analyisis, also known as Sobol method, decomposes the variance of the output of a model into fractions. By this why you can atributed them to one or a set of inputs.

For example:

"Argentina's gross domestic product had dropped more than 50% last year. This is explained almost entirely because there was a 60% depreciation of the local currency and not that much because of the closing of several industries."

GDP is one variable, Local currency value & industrial growth are two inputs.