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Table of Contents
Introduction..... 1
About This Book.....1
Foolish Assumptions.....2
Icons Used in This Book.....2
Beyond the Book.....3
Where to Go from Here.....3
Part I: Getting Started with Data Mining...... 5
Chapter 1: Catching the Data-Mining Train. 7
Getting Real about Data Mining.....7
Not your professor’s statistics.....8
The value of data mining.....8
Working for it.....9
Doing What Data Miners Do.....10
Focusing on the business.....10
Understanding how data miners spend their time.....11
Getting to know the data-mining process.....11
Making models.....12
Understanding mathematical models.....12
Putting information into action.....13
Discovering Tools and Methods.....13
Visual programming.....14
Working quick and dirty.....15
Testing, testing, and testing some more........16
Chapter 2: A Day in Your Life as a Data Miner. 17
Starting Your Day Off Right.....17
Meeting the team.....18
Exploring with aim.....18
Structuring time with the right process........20
Understanding Your Business Goals......20
Understanding Your Data.....22
Describing data.....22
Exploring data.....23
Cleaning data.....27
Preparing Your Data.....28
Taking first steps with the property data.....28
Preparing the ownership change indicator............32
Merging the datasets.....32
Deriving new variables..........34
viii Data Mining For Dummies
Modeling Your Data.....40
Using balanced data.....40
Splitting data.....41
Building a model.....43
Evaluating Your Results.....44
Examining the decision tree..........44
Using a diagnostic chart.......46
Assessing the status of the model.........47
Putting Your Results into Action............48
Chapter 3: Teaming Up to Reach Your Goals. 49
Nothing Could Be Finer Than to Be a Data Miner...........49
You can be a data miner.....50
Using the knowledge you have..............51
Data Miners Play Nicely with Others..............51
Cooperation is a necessity............51
Oh, the people you’ll meet!............53
Working with Executives.....56
Greetings and elicitations..............57
Lining up your priorities.......58
Talking data mining with executives.....58
Part II: Exploring Data-Mining Mantras and Methods..... 61
Chapter 4: Learning the Laws of Data Mining. 63
1st Law: Business Goals.....63
2nd Law: Business Knowledge.......64
3rd Law: Data Preparation.....65
4th Law: Right Model......66
5th Law: Pattern.....67
6th Law: Amplification.....68
7th Law: Prediction.....69
8th Law: Value.....70
9th Law: Change.....70
Chapter 5: Embracing the Data-Mining Process. 73
Whose Standard Is It, Anyway?...............73
Approaching the process in phases......74
Cycling through phases and projects............74
Documenting your work.......75
Business Understanding.....76
Data Understanding.....79
Data Preparation.....82
Modeling.....84
Evaluation.....86
Deployment.....87
Table of Contents ix
Chapter 6: Planning for Data-Mining Success . 89
Setting the Course with Formal Business Cases.....89
Satisfying the boss.....90
Minimizing your own risk..............91
Building Business Cases.....91
Elements of the business case......92
Putting it in writing.....94
The basics on benefits..........94
Avoiding the Failure Option...........95
Chapter 7: Gearing Up with the Right Sof tware. 97
Putting Data-Mining Tools in Perspective......97
Avoiding software risks.........98
Focusing on business goals, not tools...........99
Determining what you need........100
Comparing tools.....101
Shopping for software.........103
Evaluating Software.....104
Don’t fall in love (with your software).........105
Engaging with sales representatives............106
The sales professional’s mantra — BANT............107
Part III: Gathering the Raw Materials....... 109
Chapter 8: Digging into Your Data. 111
Focusing on a Problem.....111
Managing Scope.....113
Using Your Organization’s Own Data............115
Appreciating your own data........116
Handling data with respect.........117
Chapter 9: Making New Data. 119
Fathoming Loyalty Programs.......119
Grasping the loyalty concept......120
Your data bonanza..............121
Putting loyalty data to work........122
Testing, Testing . . .....124
Experimenting in direct marketing......125
Spying test opportunities............126
Testing online.....126
Microtargeting to Win Elections...........127
Treating voters as individuals..............127
Looking at an example........128
Enhancing voter data..........128
x Data Mining For Dummies
Gaining an information advantage.......129
Developing your own test data............129
Taking discoveries on the campaign trail....130
Surveying the Public Landscape...........131
Eliciting information with surveys.......131
Using surveys.....132
Developing questions..........133
Conducting surveys.............134
Recognizing limitations.......134
Bringing in help.....135
Getting into the Field......136
Going where no data miner has gone before.......136
Doing more than asking...............137
One Challenge, Many Approaches.......138
Chapter 10: Ferreting Out Public Data Sources. 141
Looking Over the Lay of the Land........141
Exploring Public Data Sources..............142
United States federal government.......144
Governments around the world...........157
United States state and local governments..........158
Chapter 11: Buying Data. 163
Peeking at Consumer Data...........164
Beyond Consumer Data.....167
Desperately Seeking Sources.......168
Assessing Quality and Suitability.........169
Part IV: A Data Miner’s Survival Kit......... 171
Chapter 12: Get ting Familiar with Your Data. 173
Organizing Data for Mining...........173
Getting Data from There to Here..........175
Text files.....175
Databases.....189
Spreadsheets, XML, and specialty data formats...........190
Surveying Your Data.....191
Chapter 13: Dealing in Graphic Detail. 195
Starting Simple.....195
Eyeballing variables with bar charts and histograms..196
Relating one variable to another with scatterplots......199
Table of Contents xi
Building on Basics.....202
Making scatterplots say more..............202
Interacting with scatterplots.......204
Working Fast with Graphs Galore.........211
Extending Your Graphics Range...........213
Chapter 14: Showing Your Data Who’s Boss. 219
Rearranging Data.....220
Controlling variable order...........220
Formatting data properly............221
Labeling data.....223
Controlling case order.....226
Getting rows and columns right..........228
Putting data where you need it............229
Sifting Out the Data You Need..............233
Narrowing the fields.....233
Selecting relevant cases...............235
Sampling.....236
Getting the Data Together.....238
Merging.....238
Appending.....239
Making New Data from Old Data...........239
Deriving new variables........240
Aggregation.....240
Saving Time.....243
Chapter 15: Your Exciting Career in Modeling . 245
Grasping Modeling Concepts.....245
Cultivating Decision Trees.....247
Examining a decision tree............247
Using decision trees to aid communication.........248
Constructing a decision tree.......249
Getting acquainted with common decision tree types.........260
Adapting to your tools........261
Neural Networks for Prediction............263
Looking inside a neural network..........263
Issues surrounding neural network models.........266
Clustering.....267
Supervised and unsupervised learning........268
Clustering to clarify.....268
xii Data Mining For Dummies
Part V: More Data-Mining Methods........... 273
Chapter 16: Data Mining Using Classic Statistical Methods. 275
Understanding Correlation...........275
Picturing correlations.........276
Measuring the strength of a correlation......278
Drawing lines in the data.............279
Giving correlations a try..............280
Understanding Linear Regression........283
Working with straight lines.........283
Finding the best line.....287
Using linear regression coefficients.............288
Interpreting model statistics.......290
Applying common sense..............290
Understanding Logistic Regression..............292
Looking into logistic regression...........292
Appreciating the appeal of logistic regression....293
Looking over a logistic regression example.........293
Chapter 17: Mining Data for Clues. 295
Tracking Combinations.....296
Finding Associations in Data........296
Structuring association rules......297
Getting ready.....297
Shopping for associations...........300
Refining results.....303
Understanding the metrics..........306
Chapter 18: Expanding Your Horizons. 307
Squeezing More Out of What You Have........307
Mastering your data-mining application......307
Fine-tuning your settings.............308
Analyzing your analysis...............309
Using meta-models (ensemble models).......309
Widening Your Range.....310
Tackling text.....310
Detecting sequences...........312
Working with time series.............313
Taking on Big Data.....314
Coming to terms with Big Data............315
Conducting predictive analytics with Big Data....315
Blending Methods for Best Results......317
Table of Contents xiii
Part VI: The Part of Tens........ 319
Chapter 19: Ten Great Resources for Data Miners. 321
Society of Data Miners.....321
KDnuggets.....321
All Analytics.....322
The New York Times......322
Forbes.....323
SmartData Collective.....323
CRISP-DM Process Model......323
Nate Silver.....324
Meta’s Analytics Articles page..............324
First Internet Gallery of Statistics Jokes.......324
Chapter 20: Ten Useful Kinds of Analysis That Complement
Data Mining. 325
Business Analysis.....325
Conjoint Analysis.....326
Design of Experiments.....327
Marketing Mix Modeling.....327
Operations Research.....328
Reliability Analysis.....329
Statistical Process Control...........330
Social Network Analysis.....330
Structural Equation Modeling...............331
Web Analytics.....331
Appendix A: Glossary............. 333
Appendix B: Data-Mining Sof tware Sources........ 339
Appendix C: Major Data Vendors...... 349
Appendix D: Sources and Citations... 357
Index......... 361