- leaf nodes perform a numeric prediction
- using a linear or nonlinear regression
- over the target values associated with the leaf node

- Each leaf node represents a model,
- as a function of input variables,
- where the model minimizes a MSE or SDR for the subset associated with the leaf node
- Induced in the same way as a regression tree
- Example
- Time-series prediction

**All regression tree aspects also apply to model trees:**