### Handbook of Statistical Analysis and Data Mining Applications

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Analytical modeling is a lot like that. The training of the hurdler's model of action to run the race happens in a series of operations:. Individual neurons in the brain are trained in practice by adjusting signal strengths and firing thresholds of the motor nerve cells. The performance of a successful hurdler follows the model of these activities and the process of coordinating them to run the race.

Creation of an analytical model of a business process to predict a desired outcome follows a very similar path to the training regimen of a hurdler. We will explore this subject further in Chapter 3 and apply it to develop a data mining process that expresses the basic activities and tasks performed in creating an analytical model. In humans, the right side of the brain is the center for visual and aesthetic sensibilities. The left side of the brain is the center for quantitative and time-regulated sensibilities. Human intuition is a blend of both sensibilities.

This blend is facilitated by the neural connections between the right side of the brain and the left side. This higher connectivity of women's brains enables them to exercise intuitive thinking to a greater extent than men.

## ISBN 13: 9780123747655

Intuition builds a model of reality from both quantitative building blocks and visual sensibilities and memories. Biological taxonomy students claim in jest that there are two kinds of people in taxonomy—those who divide things up into two classes for dichotomous keys and those who don't. Along with this joke is a similar recognition that taxonomists are divided into the lumpers who combine several species into one and the splitters who divide one species into many.

These distinctions point to a larger dichotomy in the way people think. In ecology, there used to be two schools of thought: autoecologists chemistry, physics, and mathematics explain all and the synecologists organism relationships in their environment explain all. It wasn't until the s that these two schools of thought learned that both perspectives were needed to understand ecosystems but more about that later. In business, there are the big picture people versus detail people. Some people learn by following an intuitive pathway from general to specific inductive.

Often, we call them big picture people. Other people learn by following an intuitive pathway from specific to general deductive. Often, we call them detail people. This distinction is reflected in many aspects of our society. In Chapter 1, we will explore this distinction to a greater depth in regard to the development of statistical and data mining theory through time.

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Many of our human activities involve finding patterns in the data input to our sensory systems. An example is the mental pattern that we develop by sitting in a chair in the middle of a shopping mall and making some judgment about patterns among its clientele.

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In one mall, people of many ages and races may intermingle. You might conclude from this pattern that this mall is located in an ethnically diverse area. In another mall, you might see a very different pattern. In one mall in Toronto, a great many of the stores had Chinese titles and script on the windows. One observer noticed that he was the only non-Asian seen for a half-hour. This led to the conclusion that the mall catered to the Chinese community and was owned probably by a Chinese company or person.

If the metric exceeds the standard table value, this attribute e. More advanced statistical techniques can accept data from multiple attributes and process them in combination to produce a metric e. This process builds an analytical equation, using standard statistical methods. This analytical model is based on averages across the range of variation of the input attribute data. This approach to finding the pattern in the data is basically a deductive, top-down process general to specific.

The general part is the statistical model employed for the analysis i. This approach to model building is very Aristotelian. In Chapter 1, we will explore the distinctions between Aristotelian and Platonic approaches for understanding truth in the world around us.

Both statistical analysis and data mining algorithms operate on patterns: statistical analysis uses a predefined pattern i. We will discuss this approach in more detail in Chapter 1. Data mining doesn't start with a model; it builds a model with the data. Thus, statistical analysis uses a model to characterize a pattern in the data; data mining uses the pattern in the data to build a model. This approach uses deductive reasoning , following an Aristotelian approach to truth. From the model accepted in the beginning based on the mathematical distributions assumed , outcomes are deduced.

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On the other hand, data mining methods discover patterns in data inductively , rather than deductively , following a more Platonic approach to truth. We will unpack this distinction to a much greater extent in Chapter 1. Which is the best way to do it? The answer is … it depends. It depends on the data. Some data sets can be analyzed better with statistical analysis techniques, and other data sets can be analyzed better with data mining techniques. How do you know which approach to use for a given data set? Much ink has been devoted to paper to try to answer that question.

We will not add to that effort. Rather, we will provide a guide to general analytical theory Chapter 2 and broad analytical procedures Chapter 3 that can be used with techniques for either approach. For the sake of simplicity, we will refer to the joint body of techniques as analytics. In Chapters 4 and 5, we introduce basic process and preparation procedures for analytics. Chapters 6—9 introduce accessory tools and some basic and advanced analytic algorithms used commonly for various kinds of analytics projects, followed by the use of specialized algorithms for the analysis of textual data.

## Handbook of statistical analysis and data mining applications Robert Nisbet

Chapters 10—12 provide general introductions to three common analytics tool packages and the two most common application areas for those tools classification and numerical prediction. Chapter 13 discusses various methods for evaluating the models you build. We will discuss. Additional details about these powerful techniques can be found in Chapter 5 and in Witten and Frank Chapters 14—17 guide you through the application of analytics to four common problem areas: medical informatics, bioinformatics, customer response modeling, and fraud.

One of the guiding principles in the development of this book is the inclusion of many tutorials in the body of the book and on the companion site. If you download the free trials of the other tools as described at the end of the Preface , you can follow the tutorials based on them.

In any event, the overall principle of this book is to provide enough of an introduction to get you started doing data mining, plus at least one tool for you to use in the beginning of your work. Chapters 18—20 discuss the issues in analytics regarding model complexity, parsimony, and modeling mistakes. Chapter 18, on how to measure true complexity, is the most complex and researchy chapter of the book, and can be skipped by most readers; but Chapter 20, on classic analytic mistakes, should be a big help to anyone who needs to implement real models in the real world. Chapter 21 gives you a glimpse of the future of analytics.

Where is data mining going in the future?

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Much statistical and data mining research during the past 30 years has focused on designing better algorithms for finding faint patterns in mountains of data. Current directions in data mining are organized around how to link together many processing instances rather than improving the mathematical algorithms for pattern recognition. We can see these developments taking shape in at least these major areas:.