A contextual variable is an outcome variable that describes a property of a group that a case belongs to rather than a property of the case. For example, a geodemographic variable such as the average age in a suburb where a person lives is a contextual variable. Contextual variables are used to:
- Improve prediction in situations where there are few other independent variables available.
- As a proxy for sociological variables (i.e., the characteristics of a person's social group).