Saturday, July 8, 2017

(A) Data Science in Practice with Python - Sample 1


The top trending in Twitter or other social network is the term “data science”. But ...
  • What’s the data science? 
  • How do real companies use data science to make products, services and operations better? 
  • How does it work? 
  • What does the data science lifecycle look like? 
This is the buzzword at the moment. A lot of people ask me about it. Are many questions. I’ll try answer all of these questions through of some samples.

Sample 1 - Regression

WHAT IS A REGRESSION? This is the better definition what I found [Source: Wikipedia] - Regression analysis is widely used for prediction and forecasting, where its use has substantial overlap with the field of machine learning.
HOW DOES IT WORK? Regression analysis is also used to understand which among the independent variables are related to the dependent variable, and to explore the forms of these relationships. In restricted circumstances, regression analysis can be used to infer causal relationships between the independent and dependent variables. However this can lead to illusions or false relationships, so caution is advisable; for example, correlation does not imply causation.

Sample 2 - Recommender System

WHAT IS A RECOMMENDER SYSTEM? A model that filters information to present users with a curated subset of options they’re likely to find appealing.
HOW DOES IT WORK? Generally via a collaborative approach (considering user’s previous behavior) or content based approach (based on discrete assigned characteristics).

Sample 3 - Credit Scoring

WHAT IS CREDIT SCORING? A model that determines an applicant’s creditworthiness for a mortgage, loan or credit card.
HOW DOES IT WORK? A set of decision management rules evaluates how likely an applicant is to repay debts.

Sample 4 - Dynamic Pricing

WHAT IS DYNAMIC PRICING? Modeling price as a function of supply, demand, competitor pricing and exogenous factors.
HOW DOES IT WORK? Generalized linear models and classification trees are popular techniques for estimating the “right” price to maximize expected revenue.

Sample 5 - Customer Churn

WHAT IS CUSTOMER CHURN? Predicting which customers are going to abandon a product or service.
HOW DOES IT WORK? Data scientists may consider using support vector machines, random forest or k-nearest-neighbors algorithms.

Sample 6 - Fraud Detection

WHAT IS FRAUD DETECTION? Detecting and preventing fraudulent financial transactions from being processed.
HOW DOES IT WORK? Fraud detection is a binary classification problem: “is this transaction legitimate or not?”

This post will be divided in 5 parts. In each one I’ll explain the machine learning techniques mentioned above. This is the first post and I’ll show you how work the sample 1: regression. But, first let’s start with the question (below):

- What’s the data science?

In my previous post “Tucson Best Buy Analysis”, you can know more about it. There I explain “what is” and show you some examples of the day-by-day of a Data Scientist.

Being so, let’s talk about sample 1: regression. To explain this let’s start with a simple problem, I could say “classic problem”, predicting house prices in Russia. A Kaggle's challenge what was closed on 06/29/2017. The goal is to predict the median value of a house in a particular area. As usual, we have some training data, where the answer is known to us. To our study and a better comprehension about this topic I created a notebook on Jupyter tool. To access the notebook, please click here.

Have fun! See you on next post ...

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