The continuous-lag Markov chain provides a conceptually simple, mathematically compact, and theoretically powerful model of spatial variability for categorical variables. Markov chains have a long-standing record of applicability to one-dimensional (1-D) geologic data, but 2- and 3-D applications are rare. Theoretically, a multidimensional Markov chain may assume that I-D Markov chains characterize spatial variability iii all directions. Given that a I-D continuous Markov chain carl be described concisely by a transition rare matrix, this paper develops 3-D continuous-lag Markov chain models by interpolating transition rare matrices established for three principal directions, say strike, dip, and vertical. The transition rate matrix for each principal direction can be developed directly from data or indirectly by conceptual approaches. Application of Sylvester's theorem facilitates establishment of the transition rate matrix, as well as calculation of transition probabilities. The resulting 3-D continuous-lag Markov chain models then can be applied to geostatistical estimation and simulation techniques, such as indicator cokriging, disjunctive kriging, sequential indicator simulation, and simulated annealing.
