A structural equation modeling approach to generate explanations for induced rules

The performance of an expert system depends on the quality and validity of the domain-specific knowledge built into the system. In most cases, however, domain knowledge (e.g. stock market behavior knowledge) is unstructured and differs from one domain expert to another. So, in order to acquire domain knowledge, expert system developers often take an induction approach in which a set of general rules is constructed from past examples. Expert systems based upon the induced rules were reported to perform quite well in the hold-out sample test.

However, these systems hardly provide users with an explanation which would clarify the results of a reasoning process. For this reason, users would remain unsure about whether to accept the system conclusion or not. This paper presents an approach in which explanations about the induced rules are constructed. Our approach applies the structural equation model to the quantitative data, the qualitative format of which was originally used in rule induction. This approach was implemented with Korean stock market data to show that a plausible explanation about the induced rule can be constructed.