We discuss problems associated with induction of decision rules from data w
ith numerical attributes. Real-life data frequently contain numerical attri
butes. Rule induction from numerical data requires an additional step calle
d discretization. In this step numerical values are converted into interval
s. Most existing discretization methods are used before rule induction, as
a part of data preprocessing. Some methods discretize numerical attributes
while learning decision rules. We compare the classification accuracy of a
discretization method based on conditional entropy, applied before rule ind
uction, with two newly proposed methods, incorporated directly into the rul
e induction algorithm LEM2, where discretization and rule induction are per
formed at the same time. In all three approaches the same system is used fo
r classification of new, unseen data. As a result, we conclude that an erro
r rate for all three methods does not show significant difference, however,
rules induced by the two new methods are simpler and stronger. (C) 2001 Jo
hn Wiley & Sons, Inc.