Multivariate Model

A multivariate model is a model that uses the input of, well, multiple variables to help us predict a particular value or outcome. The simplest example probably comes from the world of insurance. You just bought a car. You need insurance. The insurance agent asks you for some data like make, model, model year, number of doors, mileage, driving record, etc.

The agent inputs all those variables into a computer, and the gremlins in the computer start cross-referencing all those different values with each other. The gremlins then find a monthly insurance rate that actuarial tables say is in line with all the data entered and display that on the screen. Then you pay like eleventy-hundred dollars a month for your 1979 AMC Pacer because you have 23 moving violations on your record.