Association Analysis applies to groups of observations or transactions. Its measurements represent relationships between group items, such as the frequency of items that occur together in a group or the probability that items occur in a group that includes other specific items.
- Items can be products purchased and groups can be the market baskets in which they were purchased (this is called market basket analysis).
- Items can be accounts and groups can be the customers who opened them.
Association analysis of the preceding types is useful in determining which products and services to sell with other products and services.
For example, customers who have checking, saving and credit card accounts have certificates of deposit (CDs) with a certain frequency. There is a relationship between owning a specific account or set of accounts (antecedent) and owning one or more other specific accounts (consequent).
Association Analysis produces association rules and measures of frequency, relationship, and statistical significance associated with these rules. Association rules do not infer causality, but they may indicate relationships among items or events that you can study using analytical techniques that are more appropriate for determining the structure and nature of possible causalities.