Data Mining Tutorial

Data Mining is defined as the procedure of extracting information from

huge sets of data. In other words, we can say that data mining is mining
knowledge from data. The tutorial starts off with a basic overview and the
terminologies involved in data mining and then gradually moves on to cover
topics such as knowledge discovery, query language, classification and
prediction, decision tree induction, cluster analysis, and how to mine the
Web.

You should have an understanding of the basic database concepts such

as schema, ER model, Structured Query language and a basic knowledge of
Data Warehousing concepts.

There is a huge amount of data available in the Information Industry.

This data is of no use until it is converted into useful information. It is
necessary to analyze this huge amount of data and extract useful
information from it.
Extraction of information is not the only process we need to perform;
data mining also involves other processes such as Data Cleaning, Data
Integration, Data Transformation, Data Mining, Pattern Evaluation and Data
Presentation. Once all these processes are over, we would be able to use
this information in many applications such as Fraud Detection, Market
Analysis, Production Control, Science Exploration, etc.

What is Data Mining?

Data Mining is defined as extracting information from huge sets of data.
In other words, we can say that data mining is the procedure of mining
knowledge from data. The information or knowledge extracted so can be
used for any of the following applications −

 Market Analysis
 Fraud Detection
 Customer Retention
 Production Control
 Science Exploration
Data Mining Applications
Data mining is highly useful in the following domains −

 Market Analysis and Management

 Corporate Analysis & Risk Management
 Fraud Detection
 Apart from these, data mining can also be used in the areas of
production control, customer retention, science exploration, sports,
astrology, and Internet Web Surf-Aid

Market Analysis and Management

Listed below are the various fields of market where data mining is used −
 Customer Profiling − Data mining helps determine what kind of
people buy what kind of products.
 Identifying Customer Requirements − Data mining helps in
identifying the best products for different customers. It uses
prediction to find the factors that may attract new customers.
 Cross Market Analysis − Data mining performs
Association/correlations between product sales.
 Target Marketing − Data mining helps to find clusters of model
customers who share the same characteristics such as interests,
spending habits, income, etc.
 Determining Customer purchasing pattern − Data mining helps in
determining customer purchasing pattern.
 Providing Summary Information − Data mining provides us
various multidimensional summary reports.

Corporate Analysis and Risk Management

Data mining is used in the following fields of the Corporate Sector −
 Finance Planning and Asset Evaluation − It involves cash flow
analysis and prediction, contingent claim analysis to evaluate assets.
 Resource Planning − It involves summarizing and comparing the
resources and spending.
 Competition − It involves monitoring competitors and market
directions.

Fraud Detection
Data mining is also used in the fields of credit card services and
telecommunication to detect frauds. In fraud telephone calls, it helps to find
the destination of the call, duration of the call, time of the day or week, etc.
It also analyzes the patterns that deviate from expected norms.
Data mining deals with the kind of patterns that can be mined. On the
basis of the kind of data to be mined, there are two categories of functions
involved in Data Mining −
  Descriptive
 Classification and Prediction
Descriptive Function
The descriptive function deals with the general properties of data in the
database. Here is the list of descriptive functions −

 Class/Concept Description
 Mining of Frequent Patterns
 Mining of Associations
 Mining of Correlations
 Mining of Clusters
Class/Concept Description
Class/Concept refers to the data to be associated with the classes or
concepts. For example, in a company, the classes of items for sales include
computer and printers, and concepts of customers include big spenders and
budget spenders. Such descriptions of a class or a concept are called
class/concept descriptions. These descriptions can be derived by the
following two ways −
 Data Characterization − This refers to summarizing data of class
under study. This class under study is called as Target Class.
 Data Discrimination − It refers to the mapping or classification of a
class with some predefined group or class.

Mining of Frequent Patterns

Frequent patterns are those patterns that occur frequently in
transactional data. Here is the list of kind of frequent patterns −
 Frequent Item Set − It refers to a set of items that frequently
appear together, for example, milk and bread.
 Frequent Subsequence − A sequence of patterns that occur
frequently such as purchasing a camera is followed by memory card.
 Frequent Sub Structure − Substructure refers to different structural
forms, such as graphs, trees, or lattices, which may be combined with
item-sets or subsequences.

Mining of Association
Associations are used in retail sales to identify patterns that are
frequently purchased together. This process refers to the process of
uncovering the relationship among data and determining association rules.
For example, a retailer generates an association rule that shows that 70%
of time milk is sold with bread and only 30% of times biscuits are sold with
bread.

Mining of Correlations
It is a kind of additional analysis performed to uncover interesting statistical
correlations between associated-attribute-value pairs or between two item
sets to analyze that if they have positive, negative or no effect on each
other.

Mining of Clusters
Cluster refers to a group of similar kind of objects. Cluster analysis refers to
forming group of objects that are very similar to each other but are highly
different from the objects in other clusters.

Classification and Prediction

Classification is the process of finding a model that describes the data
classes or concepts. The purpose is to be able to use this model to predict
the class of objects whose class label is unknown. This derived model is
based on the analysis of sets of training data. The derived model can be
presented in the following forms −

 Classification (IF-THEN) Rules

 Decision Trees
 Mathematical Formulae
 Neural Networks
The list of functions involved in these processes are as follows −
 Classification − It predicts the class of objects whose class label is
unknown. Its objective is to find a derived model that describes and
distinguishes data classes or concepts. The Derived Model is based on
the analysis set of training data i.e. the data object whose class label
is well known.
 Prediction − It is used to predict missing or unavailable numerical
data values rather than class labels. Regression Analysis is generally
used for prediction. Prediction can also be used for identification of
distribution trends based on available data.
 Outlier Analysis − Outliers may be defined as the data objects that
do not comply with the general behavior or model of the data
available.
 Evolution Analysis − Evolution analysis refers to the description and
model regularities or trends for objects whose behavior changes over
time.
Data Mining Task Primitives

 We can specify a data mining task in the form of a data mining query.
 This query is input to the system.
 A data mining query is defined in terms of data mining task primitives.
Note − These primitives allow us to communicate in an interactive manner
with the data mining system. Here is the list of Data Mining Task Primitives
Set of task relevant data to be mined.

 Kind of knowledge to be mined.

 Background knowledge to be used in discovery process.
 Interestingness measures and thresholds for pattern evaluation.
 Representation for visualizing the discovered patterns.
Set of task relevant data to be mined
This is the portion of database in which the user is interested. This portion
includes the following −

 Database Attributes
 Data Warehouse dimensions of interest
Kind of knowledge to be mined
It refers to the kind of functions to be performed. These functions are −

 Characterization
 Discrimination
 Association and Correlation Analysis
 Classification
 Prediction
 Clustering
 Outlier Analysis
 Evolution Analysis
Background knowledge
The background knowledge allows data to be mined at multiple levels
of abstraction. For example, the Concept hierarchies are one of the
background knowledge that allows data to be mined at multiple levels of
abstraction.

Interestingness measures and thresholds for pattern evaluation

This is used to evaluate the patterns that are discovered by the
process of knowledge discovery. There are different interesting measures
for different kind of knowledge.
Representation for visualizing the discovered patterns
This refers to the form in which discovered patterns are to be
displayed. These representations may include the following. −

 Rules
 Tables
 Charts
 Graphs
 Decision Trees
 Cubes
Data mining is not an easy task, as the algorithms used can get very
complex and data is not always available at one place. It needs to be
integrated from various heterogeneous data sources. These factors also
create some issues. Here in this tutorial, we will discuss the major issues
regarding −

 Mining Methodology and User Interaction

 Performance Issues
 Diverse Data Types Issues
The following diagram describes the major issues.
Mining Methodology and User Interaction Issues
It refers to the following kinds of issues −
 Mining different kinds of knowledge in databases − Different
users may be interested in different kinds of knowledge. Therefore it
is necessary for data mining to cover a broad range of knowledge
discovery task.
 Interactive mining of knowledge at multiple levels of
abstraction − The data mining process needs to be interactive
because it allows users to focus the search for patterns, providing and
refining data mining requests based on the returned results.
 Incorporation of background knowledge − To guide discovery
process and to express the discovered patterns, the background
knowledge can be used. Background knowledge may be used to
express the discovered patterns not only in concise terms but at
multiple levels of abstraction.
 Data mining query languages and ad hoc data mining − Data
Mining Query language that allows the user to describe ad hoc mining
tasks, should be integrated with a data warehouse query language
and optimized for efficient and flexible data mining.
 Presentation and visualization of data mining results − Once the
patterns are discovered it needs to be expressed in high level
languages, and visual representations. These representations should
be easily understandable.
 Handling noisy or incomplete data − The data cleaning methods
are required to handle the noise and incomplete objects while mining
the data regularities. If the data cleaning methods are not there then
the accuracy of the discovered patterns will be poor.
 Pattern evaluation − The patterns discovered should be interesting
because either they represent common knowledge or lack novelty.

Performance Issues
There can be performance-related issues such as follows −
 Efficiency and scalability of data mining algorithms − In order to
effectively extract the information from huge amount of data in
databases, data mining algorithm must be efficient and scalable.
 Parallel, distributed, and incremental mining algorithms − The
factors such as huge size of databases, wide distribution of data, and
complexity of data mining methods motivate the development of
parallel and distributed data mining algorithms. These algorithms
 divide the data into partitions which is further processed in a parallel
fashion. Then the results from the partitions is merged. The
incremental algorithms, update databases without mining the data
again from scratch.

Diverse Data Types Issues

 Handling of relational and complex types of data − The database
may contain complex data objects, multimedia data objects, spatial
data, temporal data etc. It is not possible for one system to mine all
these kind of data.
 Mining information from heterogeneous databases and global
information systems − The data is available at different data
sources on LAN or WAN. These data source may be structured, semi
structured or unstructured. Therefore mining the knowledge from
them adds challenges to data mining.

Data Warehouse
A data warehouse exhibits the following characteristics to support the
management's decision-making process −
 Subject Oriented − Data warehouse is subject oriented because it
provides us the information around a subject rather than the
organization's ongoing operations. These subjects can be product,
customers, suppliers, sales, revenue, etc. The data warehouse does
not focus on the ongoing operations, rather it focuses on modelling
and analysis of data for decision-making.
 Integrated − Data warehouse is constructed by integration of data
from heterogeneous sources such as relational databases, flat files
etc. This integration enhances the effective analysis of data.
 Time Variant − The data collected in a data warehouse is identified
with a particular time period. The data in a data warehouse provides
information from a historical point of view.
 Non-volatile − Nonvolatile means the previous data is not removed
when new data is added to it. The data warehouse is kept separate
from the operational database therefore frequent changes in
operational database is not reflected in the data warehouse.

Data Warehousing
Data warehousing is the process of constructing and using the data
warehouse. A data warehouse is constructed by integrating the data from
multiple heterogeneous sources. It supports analytical reporting, structured
and/or ad hoc queries, and decision making.
 Data warehousing involves data cleaning, data integration, and data
consolidations. To integrate heterogeneous databases, we have the
following two approaches −

 Query Driven Approach

 Update Driven Approach
Query-Driven Approach
This is the traditional approach to integrate heterogeneous databases.
This approach is used to build wrappers and integrators on top of multiple
heterogeneous databases. These integrators are also known as mediators.

Process of Query Driven Approach

 When a query is issued to a client side, a metadata dictionary
translates the query into the queries, appropriate for the individual
heterogeneous site involved.
 Now these queries are mapped and sent to the local query processor.
 The results from heterogeneous sites are integrated into a global
answer set.

Disadvantages
This approach has the following disadvantages −
 The Query Driven Approach needs complex integration and filtering
processes.
 It is very inefficient and very expensive for frequent queries.
 This approach is expensive for queries that require aggregations.

Update-Driven Approach
Today's data warehouse systems follow update-driven approach rather than
the traditional approach discussed earlier. In the update-driven approach,
the information from multiple heterogeneous sources is integrated in
advance and stored in a warehouse. This information is available for direct
querying and analysis.

Advantages
This approach has the following advantages −
 This approach provides high performance.
 The data can be copied, processed, integrated, annotated,
summarized and restructured in the semantic data store in advance.
Query processing does not require interface with the processing at local
sources.
From Data Warehousing (OLAP) to Data Mining (OLAM)
Online Analytical Mining integrates with Online Analytical Processing
with data mining and mining knowledge in multidimensional databases.
Here is the diagram that shows the integration of both OLAP and OLAM −

Importance of OLAM
OLAM is important for the following reasons −
 High quality of data in data warehouses − The data mining tools
are required to work on integrated, consistent, and cleaned data.
 These steps are very costly in the preprocessing of data. The data
warehouses constructed by such preprocessing are valuable sources
of high quality data for OLAP and data mining as well.
 Available information processing infrastructure surrounding
data warehouses − Information processing infrastructure refers to
accessing, integration, consolidation, and transformation of multiple
heterogeneous databases, web-accessing and service facilities,
reporting and OLAP analysis tools.
 OLAP−based exploratory data analysis − Exploratory data
analysis is required for effective data mining. OLAM provides facility
for data mining on various subset of data and at different levels of
abstraction.
 Online selection of data mining functions − Integrating OLAP with
multiple data mining functions and online analytical mining provide
users with the flexibility to select desired data mining functions and
swap data mining tasks dynamically.

Data Mining
Data mining is defined as extracting the information from a huge set
of data. In other words we can say that data mining is mining the
knowledge from data. This information can be used for any of the following
applications −

 Market Analysis
 Fraud Detection
 Customer Retention
 Production Control
 Science Exploration
Data Mining Engine
Data mining engine is very essential to the data mining system. It
consists of a set of functional modules that perform the following functions
−

 Characterization
 Association and Correlation Analysis
 Classification
 Prediction
 Cluster analysis
 Outlier analysis
 Evolution analysis
Knowledge Base
This is the domain knowledge. This knowledge is used to guide the
search or evaluate the interestingness of the resulting patterns.

Knowledge Discovery
Some people treat data mining same as knowledge discovery, while
others view data mining as an essential step in the process of knowledge
discovery. Here is the list of steps involved in the knowledge discovery
process −

 Data Cleaning
 Data Integration
 Data Selection
 Data Transformation
 Data Mining
 Pattern Evaluation
 Knowledge Presentation
User interface
User interface is the module of data mining system that helps the
communication between users and the data mining system. User Interface
allows the following functionalities −

 Interact with the system by specifying a data mining query task.

 Providing information to help focus the search.
 Mining based on the intermediate data mining results.
 Browse database and data warehouse schemas or data structures.
 Evaluate mined patterns.
 Visualize the patterns in different forms.
Data Integration
Data Integration is a data preprocessing technique that merges the
data from multiple heterogeneous data sources into a coherent data store.
Data integration may involve inconsistent data and therefore needs data
cleaning.

Data Cleaning
Data cleaning is a technique that is applied to remove the noisy data
and correct the inconsistencies in data. Data cleaning involves
transformations to correct the wrong data. Data cleaning is performed as a
data preprocessing step while preparing the data for a data warehouse.
Data Selection
Data Selection is the process where data relevant to the analysis task
are retrieved from the database. Sometimes data transformation and
consolidation are performed before the data selection process.

Clusters
Cluster refers to a group of similar kind of objects. Cluster analysis
refers to forming group of objects that are very similar to each other but
are highly different from the objects in other clusters.

Data Transformation
In this step, data is transformed or consolidated into forms
appropriate for mining, by performing summary or aggregation operations.

What is Knowledge Discovery?

Some people don’t differentiate data mining from knowledge discovery
while others view data mining as an essential step in the process of
knowledge discovery. Here is the list of steps involved in the knowledge
discovery process −
 Data Cleaning − In this step, the noise and inconsistent data is
removed.
 Data Integration − In this step, multiple data sources are combined.
 Data Selection − In this step, data relevant to the analysis task are
retrieved from the database.
 Data Transformation − In this step, data is transformed or
consolidated into forms appropriate for mining by performing
summary or aggregation operations.
 Data Mining − In this step, intelligent methods are applied in order
to extract data patterns.
 Pattern Evaluation − In this step, data patterns are evaluated.
 Knowledge Presentation − In this step, knowledge is represented.
The following diagram shows the process of knowledge discovery −
 There is a large variety of data mining systems available. Data mining
systems may integrate techniques from the following −

 Spatial Data Analysis

 Information Retrieval
 Pattern Recognition
 Image Analysis
 Signal Processing
 Computer Graphics
 Web Technology
 Business
  Bioinformatics
Data Mining System Classification
A data mining system can be classified according to the following
criteria −

 Database Technology
 Statistics
 Machine Learning
 Information Science
 Visualization
 Other Disciplines

Apart from these, a data mining system can also be classified based
on the kind of (a) databases mined, (b) knowledge mined, (c) techniques
utilized, and (d) applications adapted.

Classification Based on the Databases Mined

We can classify a data mining system according to the kind of
databases mined. Database system can be classified according to different
criteria such as data models, types of data, etc. And the data mining
system can be classified accordingly.
 For example, if we classify a database according to the data model,
then we may have a relational, transactional, object-relational, or data
warehouse mining system.

Classification Based on the kind of Knowledge Mined

We can classify a data mining system according to the kind of
knowledge mined. It means the data mining system is classified on the
basis of functionalities such as −

 Characterization
 Discrimination
 Association and Correlation Analysis
 Classification
 Prediction
 Outlier Analysis
 Evolution Analysis
Classification Based on the Techniques Utilized
We can classify a data mining system according to the kind of
techniques used. We can describe these techniques according to the degree
of user interaction involved or the methods of analysis employed.

Classification Based on the Applications Adapted

We can classify a data mining system according to the applications
adapted. These applications are as follows −

 Finance
 Telecommunications
 DNA
 Stock Markets
 E-mail
Integrating a Data Mining System with a DB/DW System
If a data mining system is not integrated with a database or a data
warehouse system, then there will be no system to communicate with. This
scheme is known as the non-coupling scheme. In this scheme, the main
focus is on data mining design and on developing efficient and effective
algorithms for mining the available data sets.

The list of Integration Schemes is as follows −

 No Coupling − In this scheme, the data mining system does not

utilize any of the database or data warehouse functions. It fetches the
data from a particular source and processes that data using some
data mining algorithms. The data mining result is stored in another
file.

 Loose Coupling − In this scheme, the data mining system may use
some of the functions of database and data warehouse system. It
fetches the data from the data respiratory managed by these systems
and performs data mining on that data. It then stores the mining
result either in a file or in a designated place in a database or in a
data warehouse.

 Semi−tight Coupling − In this scheme, the data mining system is

linked with a database or a data warehouse system and in addition to
that, efficient implementations of a few data mining primitives can be
provided in the database.

 Tight coupling − In this coupling scheme, the data mining system is

smoothly integrated into the database or data warehouse system. The
data mining subsystem is treated as one functional component of an
information system.
The Data Mining Query Language (DMQL) was proposed by Han, Fu,
Wang, et al. for the DBMiner data mining system. The Data Mining Query
Language is actually based on the Structured Query Language (SQL). Data
Mining Query Languages can be designed to support ad hoc and interactive
data mining. This DMQL provides commands for specifying primitives. The
DMQL can work with databases and data warehouses as well. DMQL can be
used to define data mining tasks. Particularly we examine how to define
data warehouses and data marts in DMQL.

Syntax for Task-Relevant Data Specification

Here is the syntax of DMQL for specifying task-relevant data −

use database database_name

or

use data warehouse data_warehouse_name

in relevance to att_or_dim_list
from relation(s)/cube(s) [where condition]
order by order_list
group by grouping_list

Syntax for Specifying the Kind of Knowledge

Here we will discuss the syntax for Characterization, Discrimination,
Association, Classification, and Prediction.

Characterization
The syntax for characterization is −

mine characteristics [as pattern_name]

analyze {measure(s) }
The analyze clause, specifies aggregate measures, such as count, sum, or
count%.
For example −

Description describing customer purchasing habits.

mine characteristics as customerPurchasing
analyze count%

Discrimination
The syntax for Discrimination is −

mine comparison [as {pattern_name]}

For {target_class } where {t arget_condition }
{versus {contrast_class_i }
where {contrast_condition_i}}
analyze {measure(s) }
For example, a user may define big spenders as customers who purchase
items that cost $100 or more on an average; and budget spenders as
customers who purchase items at less than $100 on an average. The
mining of discriminant descriptions for customers from each of these
categories can be specified in the DMQL as −

mine comparison as purchaseGroups

for bigSpenders where avg(I.price) ≥$100
versus budgetSpenders where avg(I.price)< $100
analyze count
Association
The syntax for Association is−

mine associations [ as {pattern_name} ]

{matching {metapattern} }
For Example −

mine associations as buyingHabits

matching P(X:customer,W) ^ Q(X,Y) ≥ buys(X,Z)
where X is key of customer relation; P and Q are predicate variables; and
W, Y, and Z are object variables.

Classification
The syntax for Classification is −

mine classification [as pattern_name]

analyze classifying_attribute_or_dimension
For example, to mine patterns, classifying customer credit rating where the
classes are determined by the attribute credit_rating, and mine
classification is determined as classifyCustomerCreditRating.

analyze credit_rating

Prediction
The syntax for prediction is −

mine prediction [as pattern_name]

analyze prediction_attribute_or_dimension
{set {attribute_or_dimension_i= value_i}}

Syntax for Concept Hierarchy Specification

To specify concept hierarchies, use the following syntax −

use hierarchy <hierarchy> for <attribute_or_dimension>

We use different syntaxes to define different types of hierarchies such as−

-schema hierarchies
define hierarchy time_hierarchy on date as [date,month quarter,year]
-
set-grouping hierarchies
define hierarchy age_hierarchy for age on customer as
level1: {young, middle_aged, senior} < level0: all
level2: {20, ..., 39} < level1: young
level3: {40, ..., 59} < level1: middle_aged
level4: {60, ..., 89} < level1: senior
-operation-derived hierarchies
define hierarchy age_hierarchy for age on customer as
{age_category(1), ..., age_category(5)}
:= cluster(default, age, 5) < all(age)

-rule-based hierarchies
define hierarchy profit_margin_hierarchy on item as
level_1: low_profit_margin < level_0: all

if (price - cost)< $50

level_1: medium-profit_margin < level_0: all

if ((price - cost) > $50) and ((price - cost) ≤ $250))

level_1: high_profit_margin < level_0: all

Syntax for Interestingness Measures Specification

Interestingness measures and thresholds can be specified by the user with
the statement −

with <interest_measure_name> threshold = threshold_value

For Example −

with support threshold = 0.05

with confidence threshold = 0.7

Syntax for Pattern Presentation and Visualization Specification

We have a syntax, which allows users to specify the display of discovered
patterns in one or more forms.

display as <result_form>
For Example −

display as table

Full Specification of DMQL

As a market manager of a company, you would like to characterize the
buying habits of customers who can purchase items priced at no less than
$100; with respect to the customer's age, type of item purchased, and the
place where the item was purchased. You would like to know the
percentage of customers having that characteristic. In particular, you are
only interested in purchases made in Canada, and paid with an American
Express credit card. You would like to view the resulting descriptions in the
form of a table.

use database AllElectronics_db

use hierarchy location_hierarchy for B.address
mine characteristics as customerPurchasing
analyze count%
in relevance to C.age,I.type,I.place_made
from customer C, item I, purchase P, items_sold S, branch B
where I.item_ID = S.item_ID and P.cust_ID = C.cust_ID and
P.method_paid = "AmEx" and B.address = "Canada" and I.price ≥ 100
with noise threshold = 5%
display as table

Data Mining Languages Standardization

Standardizing the Data Mining Languages will serve the following purposes
−
 Helps systematic development of data mining solutions.
 Improves interoperability among multiple data mining systems and
functions.
 Promotes education and rapid learning.
 Promotes the use of data mining systems in industry and society.
There are two forms of data analysis that can be used for extracting
models describing important classes or to predict future data trends. These
two forms are as follows −

 Classification
 Prediction
Classification models predict categorical class labels; and prediction
models predict continuous valued functions. For example, we can build a
classification model to categorize bank loan applications as either safe or
risky, or a prediction model to predict the expenditures in dollars of
potential customers on computer equipment given their income and
occupation.

What is classification?
Following are the examples of cases where the data analysis task is
Classification −
 A bank loan officer wants to analyze the data in order to know which
customer (loan applicant) are risky or which are safe.
 A marketing manager at a company needs to analyze a customer with
a given profile, who will buy a new computer.
In both of the above examples, a model or classifier is constructed to
predict the categorical labels. These labels are risky or safe for loan
application data and yes or no for marketing data.
What is prediction?
Following are the examples of cases where the data analysis task is
Prediction −
Suppose the marketing manager needs to predict how much a given
customer will spend during a sale at his company. In this example we are
bothered to predict a numeric value. Therefore the data analysis task is an
example of numeric prediction. In this case, a model or a predictor will be
constructed that predicts a continuous-valued-function or ordered value.
Note − Regression analysis is a statistical methodology that is most often
used for numeric prediction.

How Does Classification Works?

With the help of the bank loan application that we have discussed
above, let us understand the working of classification. The Data
Classification process includes two steps −

 Building the Classifier or Model

 Using Classifier for Classification
Building the Classifier or Model
 This step is the learning step or the learning phase.

 In this step the classification algorithms build the classifier.

 The classifier is built from the training set made up of database tuples
and their associated class labels.
 Each tuple that constitutes the training set is referred to as a category
or class. These tuples can also be referred to as sample, object or
data points.
Using Classifier for Classification
In this step, the classifier is used for classification. Here the test data is
used to estimate the accuracy of classification rules. The classification rules
can be applied to the new data tuples if the accuracy is considered
acceptable.

Classification and Prediction Issues

The major issue is preparing the data for Classification and Prediction.
Preparing the data involves the following activities −
 Data Cleaning − Data cleaning involves removing the noise and
treatment of missing values. The noise is removed by applying
smoothing techniques and the problem of missing values is solved by
 replacing a missing value with most commonly occurring value for
that attribute.
 Relevance Analysis − Database may also have the irrelevant
attributes. Correlation analysis is used to know whether any two given
attributes are related.
 Data Transformation and reduction − The data can be
transformed by any of the following methods.
o Normalization − The data is transformed using normalization.
Normalization involves scaling all values for given attribute in
order to make them fall within a small specified range.
Normalization is used when in the learning step, the neural
networks or the methods involving measurements are used.
o Generalization − The data can also be transformed by
generalizing it to the higher concept. For this purpose we can
use the concept hierarchies.
Note − Data can also be reduced by some other methods such as wavelet
transformation, binning, histogram analysis, and clustering.
Supervised learning Vs Unsupervised learning

 Supervised learning (classification)

 Supervision: The training data (observations, measurements, etc.) are accompanied by

labels indicating the class of the observations

 New data is classified based on the training set

 Unsupervised learning (clustering)

 The class labels of training data is unknown

Given a set of measurements, observations, etc. with the aim of establishing the existence of
classes or clusters in the data

Classification Vs Numeric Prediction

 Classification

 predicts categorical class labels (discrete or nominal)

 classifies data (constructs a model) based on the training set and the values (class labels)
in a classifying attribute and uses it in classifying new data

 Numeric Prediction
  models continuous-valued functions, i.e., predicts unknown or missing values

 Typical applications

 Credit/loan approval:

 Medical diagnosis: if a tumor is cancerous or benign

 Fraud detection: if a transaction is fraudulent

 Web page categorization: which category it is

Classification – A two step process

 Model construction: describing a set of predetermined classes

 Each tuple/sample is assumed to belong to a predefined class, as determined by the

class label attribute

 The set of tuples used for model construction is training set

 The model is represented as classification rules, decision trees, or mathematical

formulae

 Model usage: for classifying future or unknown objects

 Estimate accuracy of the model

 The known label of test sample is compared with the classified result from the
model

 Accuracy rate is the percentage of test set samples that are correctly classified
by the model

 Test set is independent of training set (otherwise overfitting)

 If the accuracy is acceptable, use the model to classify new data

 Note: If the test set is used to select models, it is called validation (test) set
 Process (2): Using the Model in Prediction

Comparison of Classification and Prediction Methods

Here is the riteria for comparing the methods of Classification and
Prediction −
 Accuracy − Accuracy of classifier refers to the ability of classifier. It
predict the class label correctly and the accuracy of the predictor
refers to how well a given predictor can guess the value of predicted
attribute for a new data.
 Speed − This refers to the computational cost in generating and using
the classifier or predictor.
 Robustness − It refers to the ability of classifier or predictor to make
correct predictions from given noisy data.
 Scalability − Scalability refers to the ability to construct the classifier
or predictor efficiently; given large amount of data.
 Interpretability − It refers to what extent the classifier or predictor
understands.
A decision tree is a structure that includes a root node, branches, and
leaf nodes. Each internal node denotes a test on an attribute, each branch
denotes the outcome of a test, and each leaf node holds a class label. The
topmost node in the tree is the root node.
The following decision tree is for the concept buy_computer that
indicates whether a customer at a company is likely to buy a computer or
not. Each internal node represents a test on an attribute. Each leaf node
represents a class.

The benefits of having a decision tree are as follows −

 It does not require any domain knowledge.

 It is easy to comprehend.
 The learning and classification steps of a decision tree are simple and
fast.
Decision Tree Induction Algorithm
A machine researcher named J. Ross Quinlan in 1980 developed a
decision tree algorithm known as ID3 (Iterative Dichotomiser). Later, he
presented C4.5, which was the successor of ID3. ID3 and C4.5 adopt a
greedy approach. In this algorithm, there is no backtracking; the trees are
constructed in a top-down recursive divide-and-conquer manner.

Generating a decision tree form training tuples of data partition D

Algorithm : Generate_decision_tree

Input:
Data partition, D, which is a set of training tuples
and their associated class labels.
attribute_list, the set of candidate attributes.
Attribute selection method, a procedure to determine the
splitting criterion that best partitions that the data
tuples into individual classes. This criterion includes a
splitting_attribute and either a splitting point or splitting subset.

Output:
A Decision Tree

Method
create a node N;

if tuples in D are all of the same class, C then

return N as leaf node labeled with class C;

if attribute_list is empty then

return N as leaf node with labeled
with majority class in D;|| majority voting

apply attribute_selection_method(D, attribute_list)

to find the best splitting_criterion;
label node N with splitting_criterion;

if splitting_attribute is discrete-valued and

multiway splits allowed then // no restricted to binary trees

attribute_list = splitting attribute; // remove splitting attribute

for each outcome j of splitting criterion

// partition the tuples and grow subtrees for each partition

let Dj be the set of data tuples in D satisfying outcome j; // a
partition

if Dj is empty then
attach a leaf labeled with the majority
class in D to node N;
else
attach the node returned by Generate
decision tree(Dj, attribute list) to node N;
end for
return N;

Tree Pruning
Tree pruning is performed in order to remove anomalies in the
training data due to noise or outliers. The pruned trees are smaller and less
complex.
Tree Pruning Approaches
There are two approaches to prune a tree −
 Pre-pruning − The tree is pruned by halting its construction early.
 Post-pruning - This approach removes a sub-tree from a fully grown
tree.

Cost Complexity
The cost complexity is measured by the following two parameters −

 Number of leaves in the tree, and

 Error rate of the tree.
Bayesian classification is based on Bayes' Theorem. Bayesian
classifiers are the statistical classifiers. Bayesian classifiers can predict class
membership probabilities such as the probability that a given tuple belongs
to a particular class.

Baye's Theorem
Bayes' Theorem is named after Thomas Bayes. There are two types of
probabilities −

 Posterior Probability [P(H/X)]

 Prior Probability [P(H)]
where X is data tuple and H is some hypothesis.
According to Bayes' Theorem,
P(H/X)= P(X/H)P(H) / P(X)

Bayesian Belief Network

Bayesian Belief Networks specify joint conditional probability
distributions. They are also known as Belief Networks, Bayesian Networks,
or Probabilistic Networks.
 A Belief Network allows class conditional independencies to be defined
between subsets of variables.
 It provides a graphical model of causal relationship on which learning
can be performed.
 We can use a trained Bayesian Network for classification.
There are two components that define a Bayesian Belief Network −

 Directed acyclic graph

 A set of conditional probability tables
Directed Acyclic Graph

 Each node in a directed acyclic graph represents a random variable.

 These variable may be discrete or continuous valued.
 These variables may correspond to the actual attribute given in the
data.
Directed Acyclic Graph Representation
The following diagram shows a directed acyclic graph for six Boolean
variables.

The arc in the diagram allows representation of causal knowledge. For

example, lung cancer is influenced by a person's family history of lung
cancer, as well as whether or not the person is a smoker. It is worth noting
that the variable PositiveXray is independent of whether the patient has a
family history of lung cancer or that the patient is a smoker, given that we
know the patient has lung cancer.

Conditional Probability Table

The conditional probability table for the values of the variable
LungCancer (LC) showing each possible combination of the values of its
parent nodes, FamilyHistory (FH), and Smoker (S) is as follows −
IF-THEN Rules
Rule-based classifier makes use of a set of IF-THEN rules for
classification. We can express a rule in the following from −
IF condition THEN conclusion

Let us consider a rule R1,

R1: IF age = youth AND student = yes

THEN buy_computer = yes

Points to remember −

 The IF part of the rule is called rule antecedent or precondition.

 The THEN part of the rule is called rule consequent.

 The antecedent part the condition consist of one or more attribute

tests and these tests are logically ANDed.

 The consequent part consists of class prediction.

Note − We can also write rule R1 as follows −

R1: (age = youth) ^ (student = yes))(buys computer = yes)

If the condition holds true for a given tuple, then the antecedent is
satisfied.

Rule Extraction
Here we will learn how to build a rule-based classifier by extracting IF-
THEN rules from a decision tree.

Points to remember −

To extract a rule from a decision tree −

 One rule is created for each path from the root to the leaf node.

 To form a rule antecedent, each splitting criterion is logically ANDed.

 The leaf node holds the class prediction, forming the rule consequent.
Rule Induction Using Sequential Covering Algorithm
Sequential Covering Algorithm can be used to extract IF-THEN rules
form the training data. We do not require to generate a decision tree first.
In this algorithm, each rule for a given class covers many of the tuples of
that class.

Some of the sequential Covering Algorithms are AQ, CN2, and RIPPER.
As per the general strategy the rules are learned one at a time. For each
time rules are learned, a tuple covered by the rule is removed and the
process continues for the rest of the tuples. This is because the path to
each leaf in a decision tree corresponds to a rule.

Note − The Decision tree induction can be considered as learning a set of

rules simultaneously.

The Following is the sequential learning Algorithm where rules are

learned for one class at a time. When learning a rule from a class Ci, we
want the rule to cover all the tuples from class C only and no tuple form any
other class.

Algorithm: Sequential Covering

Input:
D, a data set class-labeled tuples,
Att_vals, the set of all attributes and their possible values.

Output: A Set of IF-THEN rules.

Method:
Rule_set={ }; // initial set of rules learned is empty

for each class c do

repeat
Rule = Learn_One_Rule(D, Att_valls, c);
remove tuples covered by Rule form D;
until termination condition;

Rule_set=Rule_set+Rule; // add a new rule to rule-set

end for
return Rule_Set;
Rule Pruning
The rule is pruned is due to the following reason −

 The Assessment of quality is made on the original set of training data.

The rule may perform well on training data but less well on
subsequent data. That's why the rule pruning is required.

 The rule is pruned by removing conjunct. The rule R is pruned, if

pruned version of R has greater quality than what was assessed on an
independent set of tuples.

FOIL is one of the simple and effective method for rule pruning. For a
given rule R,
FOIL_Prune = pos - neg / pos + neg

where pos and neg is the number of positive tuples covered by R,

respectively.

Note − This value will increase with the accuracy of R on the pruning set.
Hence, if the FOIL_Prune value is higher for the pruned version of R, then
we prune R.
Here we will discuss other classification methods such as Genetic
Algorithms, Rough Set Approach, and Fuzzy Set Approach.

Genetic Algorithms
The idea of genetic algorithm is derived from natural evolution. In
genetic algorithm, first of all, the initial population is created. This initial
population consists of randomly generated rules. We can represent each
rule by a string of bits.
For example, in a given training set, the samples are described by two
Boolean attributes such as A1 and A2. And this given training set contains
two classes such as C1 and C2.
We can encode the rule IF A1 AND NOT A2 THEN C2 into a bit
string 100. In this bit representation, the two leftmost bits represent the
attribute A1 and A2, respectively.
Likewise, the rule IF NOT A1 AND NOT A2 THEN C1 can be encoded
as 001.
Note − If the attribute has K values where K>2, then we can use the K bits
to encode the attribute values. The classes are also encoded in the same
manner.
Points to remember −
 Based on the notion of the survival of the fittest, a new population is
formed that consists of the fittest rules in the current population and
offspring values of these rules as well.
 The fitness of a rule is assessed by its classification accuracy on a set
of training samples.
 The genetic operators such as crossover and mutation are applied to
create offspring.
 In crossover, the substring from pair of rules are swapped to form a
new pair of rules.
 In mutation, randomly selected bits in a rule's string are inverted.

Rough Set Approach

We can use the rough set approach to discover structural relationship
within imprecise and noisy data.
Note − This approach can only be applied on discrete-valued attributes.
Therefore, continuous-valued attributes must be discretized before its use.
The Rough Set Theory is based on the establishment of equivalence
classes within the given training data. The tuples that forms the equivalence
class are indiscernible. It means the samples are identical with respect to
the attributes describing the data.
There are some classes in the given real world data, which cannot be
distinguished in terms of available attributes. We can use the rough sets
to roughly define such classes.
For a given class C, the rough set definition is approximated by two
sets as follows −
 Lower Approximation of C − The lower approximation of C consists
of all the data tuples, that based on the knowledge of the attribute,
are certain to belong to class C.
 Upper Approximation of C − The upper approximation of C consists
of all the tuples, that based on the knowledge of attributes, cannot be
described as not belonging to C.
 The following diagram shows the Upper and Lower Approximation of
class C −

Fuzzy Set Approaches

Fuzzy Set Theory is also called Possibility Theory. This theory was
proposed by Lotfi Zadeh in 1965 as an alternative the two-value
logic and probability theory. This theory allows us to work at a high level
of abstraction. It also provides us the means for dealing with imprecise
measurement of data.
The fuzzy set theory also allows us to deal with vague or inexact facts.
For example, being a member of a set of high incomes is in exact (e.g. if
$50,000 is high then what about $49,000 and $48,000). Unlike the
traditional CRISP set where the element either belong to S or its
complement but in fuzzy set theory the element can belong to more than
one fuzzy set.
For example, the income value $49,000 belongs to both the medium
and high fuzzy sets but to differing degrees. Fuzzy set notation for this
income value is as follows −

mmedium_income($49k)=0.15 and mhigh_income($49k)=0.96

where ‘m’ is the membership function that operates on the fuzzy sets
of medium_income and high_income respectively. This notation can be
shown diagrammatically as follows −
 Cluster is a group of objects that belongs to the same class. In other
words, similar objects are grouped in one cluster and dissimilar objects are
grouped in another cluster.

What is Clustering?
Clustering is the process of making a group of abstract objects into
classes of similar objects.
Points to Remember
 A cluster of data objects can be treated as one group.
 While doing cluster analysis, we first partition the set of data into
groups based on data similarity and then assign the labels to the
groups.
 The main advantage of clustering over classification is that, it is
adaptable to changes and helps single out useful features that
distinguish different groups.

Applications of Cluster Analysis

 Clustering analysis is broadly used in many applications such as
market research, pattern recognition, data analysis, and image
processing.
 Clustering can also help marketers discover distinct groups in their
customer base. And they can characterize their customer groups
based on the purchasing patterns.
 In the field of biology, it can be used to derive plant and animal
taxonomies, categorize genes with similar functionalities and gain
insight into structures inherent to populations.
  Clustering also helps in identification of areas of similar land use in an
earth observation database. It also helps in the identification of
groups of houses in a city according to house type, value, and
geographic location.
 Clustering also helps in classifying documents on the web for
information discovery.
 Clustering is also used in outlier detection applications such as
detection of credit card fraud.
 As a data mining function, cluster analysis serves as a tool to gain
insight into the distribution of data to observe characteristics of each
cluster.

Requirements of Clustering in Data Mining

The following points throw light on why clustering is required in data mining
−
 Scalability − We need highly scalable clustering algorithms to deal
with large databases.
 Ability to deal with different kinds of attributes − Algorithms
should be capable to be applied on any kind of data such as interval-
based (numerical) data, categorical, and binary data.
 Discovery of clusters with attribute shape − The clustering
algorithm should be capable of detecting clusters of arbitrary shape.
They should not be bounded to only distance measures that tend to
find spherical cluster of small sizes.
 High dimensionality − The clustering algorithm should not only be
able to handle low-dimensional data but also the high dimensional
space.
 Ability to deal with noisy data − Databases contain noisy, missing
or erroneous data. Some algorithms are sensitive to such data and
may lead to poor quality clusters.
 Interpretability − The clustering results should be interpretable,
comprehensible, and usable.

Clustering Methods
Clustering methods can be classified into the following categories −

 Partitioning Method
 Hierarchical Method
 Density-based Method
  Grid-Based Method
 Model-Based Method
 Constraint-based Method
Partitioning Method
Suppose we are given a database of ‘n’ objects and the partitioning
method constructs ‘k’ partition of data. Each partition will represent a
cluster and k ≤ n. It means that it will classify the data into k groups, which
satisfy the following requirements −
 Each group contains at least one object.
 Each object must belong to exactly one group.
Points to remember −
 For a given number of partitions (say k), the partitioning method will
create an initial partitioning.
 Then it uses the iterative relocation technique to improve the
partitioning by moving objects from one group to other.

Hierarchical Methods
This method creates a hierarchical decomposition of the given set of
data objects. We can classify hierarchical methods on the basis of how the
hierarchical decomposition is formed. There are two approaches here −

 Agglomerative Approach
 Divisive Approach
Agglomerative Approach
This approach is also known as the bottom-up approach. In this, we
start with each object forming a separate group. It keeps on merging the
objects or groups that are close to one another. It keep on doing so until all
of the groups are merged into one or until the termination condition holds.

Divisive Approach
This approach is also known as the top-down approach. In this, we
start with all of the objects in the same cluster. In the continuous iteration,
a cluster is split up into smaller clusters. It is down until each object in one
cluster or the termination condition holds. This method is rigid, i.e., once a
merging or splitting is done, it can never be undone.

Approaches to Improve Quality of Hierarchical Clustering

Here are the two approaches that are used to improve the quality of
hierarchical clustering −
  Perform careful analysis of object linkages at each hierarchical
partitioning.
 Integrate hierarchical agglomeration by first using a hierarchical
agglomerative algorithm to group objects into micro-clusters, and
then performing macro-clustering on the micro-clusters.

Density-based Method
This method is based on the notion of density. The basic idea is to
continue growing the given cluster as long as the density in the
neighborhood exceeds some threshold, i.e., for each data point within a
given cluster, the radius of a given cluster has to contain at least a
minimum number of points.

Grid-based Method
In this, the objects together form a grid. The object space is quantized
into finite number of cells that form a grid structure.
Advantages
 The major advantage of this method is fast processing time.
 It is dependent only on the number of cells in each dimension in the
quantized space.

Model-based methods
In this method, a model is hypothesized for each cluster to find the
best fit of data for a given model. This method locates the clusters by
clustering the density function. It reflects spatial distribution of the data
points.
This method also provides a way to automatically determine the
number of clusters based on standard statistics, taking outlier or noise into
account. It therefore yields robust clustering methods.

Constraint-based Method
In this method, the clustering is performed by the incorporation of
user or application-oriented constraints. A constraint refers to the user
expectation or the properties of desired clustering results. Constraints
provide us with an interactive way of communication with the clustering
process. Constraints can be specified by the user or the application
requirement.
Text databases consist of huge collection of documents. They collect
these information from several sources such as news articles, books, digital
libraries, e-mail messages, web pages, etc. Due to increase in the amount
of information, the text databases are growing rapidly. In many of the text
databases, the data is semi-structured.
For example, a document may contain a few structured fields, such as
title, author, publishing_date, etc. But along with the structure data, the
document also contains unstructured text components, such as abstract and
contents. Without knowing what could be in the documents, it is difficult to
formulate effective queries for analyzing and extracting useful information
from the data. Users require tools to compare the documents and rank their
importance and relevance. Therefore, text mining has become popular and
an essential theme in data mining.

Information Retrieval
Information retrieval deals with the retrieval of information from a
large number of text-based documents. Some of the database systems are
not usually present in information retrieval systems because both handle
different kinds of data. Examples of information retrieval system include −

 Online Library catalogue system

 Online Document Management Systems
 Web Search Systems etc.
Note − The main problem in an information retrieval system is to locate
relevant documents in a document collection based on a user's query. This
kind of user's query consists of some keywords describing an information
need.
In such search problems, the user takes an initiative to pull relevant
information out from a collection. This is appropriate when the user has ad-
hoc information need, i.e., a short-term need. But if the user has a long-
term information need, then the retrieval system can also take an initiative
to push any newly arrived information item to the user.
This kind of access to information is called Information Filtering. And
the corresponding systems are known as Filtering Systems or
Recommender Systems.

Basic Measures for Text Retrieval

We need to check the accuracy of a system when it retrieves a
number of documents on the basis of user's input. Let the set of documents
relevant to a query be denoted as {Relevant} and the set of retrieved
document as {Retrieved}. The set of documents that are relevant and
retrieved can be denoted as {Relevant} ∩ {Retrieved}. This can be shown
in the form of a Venn diagram as follows −
 There are three fundamental measures for assessing the quality of
text retrieval −

 Precision
 Recall
 F-score
Precision
Precision is the percentage of retrieved documents that are in fact
relevant to the query. Precision can be defined as −

Precision= |{Relevant} ∩ {Retrieved}| / |{Retrieved}|

Recall
Recall is the percentage of documents that are relevant to the query
and were in fact retrieved. Recall is defined as −

Recall = |{Relevant} ∩ {Retrieved}| / |{Relevant}|

F-score
F-score is the commonly used trade-off. The information retrieval
system often needs to trade-off for precision or vice versa. F-score is
defined as harmonic mean of recall or precision as follows −

F-score = recall x precision / (recall + precision) / 2

The World Wide Web contains huge amounts of information that
provides a rich source for data mining.

Challenges in Web Mining

The web poses great challenges for resource and knowledge discovery
based on the following observations −
 The web is too huge − The size of the web is very huge and rapidly
increasing. This seems that the web is too huge for data warehousing
and data mining.
 Complexity of Web pages − The web pages do not have unifying
structure. They are very complex as compared to traditional text
document. There are huge amount of documents in digital library of
 web. These libraries are not arranged according to any particular
sorted order.
 Web is dynamic information source − The information on the web
is rapidly updated. The data such as news, stock markets, weather,
sports, shopping, etc., are regularly updated.
 Diversity of user communities − The user community on the web is
rapidly expanding. These users have different backgrounds, interests,
and usage purposes. There are more than 100 million workstations
that are connected to the Internet and still rapidly increasing.
 Relevancy of Information − It is considered that a particular person
is generally interested in only small portion of the web, while the rest
of the portion of the web contains the information that is not relevant
to the user and may swamp desired results.

Mining Web page layout structure

The basic structure of the web page is based on the Document Object
Model (DOM). The DOM structure refers to a tree like structure where the
HTML tag in the page corresponds to a node in the DOM tree. We can
segment the web page by using predefined tags in HTML. The HTML syntax
is flexible therefore, the web pages does not follow the W3C specifications.
Not following the specifications of W3C may cause error in DOM tree
structure.
The DOM structure was initially introduced for presentation in the
browser and not for description of semantic structure of the web page. The
DOM structure cannot correctly identify the semantic relationship between
the different parts of a web page.

Vision-based page segmentation (VIPS)

 The purpose of VIPS is to extract the semantic structure of a web
page based on its visual presentation.
 Such a semantic structure corresponds to a tree structure. In this tree
each node corresponds to a block.
 A value is assigned to each node. This value is called the Degree of
Coherence. This value is assigned to indicate the coherent content in
the block based on visual perception.
 The VIPS algorithm first extracts all the suitable blocks from the HTML
DOM tree. After that it finds the separators between these blocks.
 The separators refer to the horizontal or vertical lines in a web page
that visually cross with no blocks.
  The semantics of the web page is constructed on the basis of these
blocks.
The following figure shows the procedure of VIPS algorithm −

Data mining is widely used in diverse areas. There are a number of

commercial data mining system available today and yet there are many
challenges in this field. In this tutorial, we will discuss the applications and
the trend of data mining.

Data Mining Applications

Here is the list of areas where data mining is widely used −

 Financial Data Analysis

 Retail Industry
 Telecommunication Industry
 Biological Data Analysis
 Other Scientific Applications
 Intrusion Detection
Financial Data Analysis
The financial data in banking and financial industry is generally
reliable and of high quality which facilitates systematic data analysis and
data mining. Some of the typical cases are as follows −
 Design and construction of data warehouses for multidimensional data
analysis and data mining.
  Loan payment prediction and customer credit policy analysis.
 Classification and clustering of customers for targeted marketing.
 Detection of money laundering and other financial crimes.

Retail Industry
Data Mining has its great application in Retail Industry because it
collects large amount of data from on sales, customer purchasing history,
goods transportation, consumption and services. It is natural that the
quantity of data collected will continue to expand rapidly because of the
increasing ease, availability and popularity of the web.
Data mining in retail industry helps in identifying customer buying
patterns and trends that lead to improved quality of customer service and
good customer retention and satisfaction. Here is the list of examples of
data mining in the retail industry −
 Design and Construction of data warehouses based on the benefits of
data mining.
 Multidimensional analysis of sales, customers, products, time and
region.
 Analysis of effectiveness of sales campaigns.
 Customer Retention.
 Product recommendation and cross-referencing of items.

Telecommunication Industry
Today the telecommunication industry is one of the most emerging
industries providing various services such as fax, pager, cellular phone,
internet messenger, images, e-mail, web data transmission, etc. Due to the
development of new computer and communication technologies, the
telecommunication industry is rapidly expanding. This is the reason why
data mining is become very important to help and understand the business.
Data mining in telecommunication industry helps in identifying the
telecommunication patterns, catch fraudulent activities, make better use of
resource, and improve quality of service. Here is the list of examples for
which data mining improves telecommunication services −
 Multidimensional Analysis of Telecommunication data.
 Fraudulent pattern analysis.
 Identification of unusual patterns.
 Multidimensional association and sequential patterns analysis.
  Mobile Telecommunication services.
 Use of visualization tools in telecommunication data analysis.

Biological Data Analysis

In recent times, we have seen a tremendous growth in the field of
biology such as genomics, proteomics, functional Genomics and biomedical
research. Biological data mining is a very important part of Bioinformatics.
Following are the aspects in which data mining contributes for biological
data analysis −
 Semantic integration of heterogeneous, distributed genomic and
proteomic databases.
 Alignment, indexing, similarity search and comparative analysis
multiple nucleotide sequences.
 Discovery of structural patterns and analysis of genetic networks and
protein pathways.
 Association and path analysis.
 Visualization tools in genetic data analysis.

Other Scientific Applications

The applications discussed above tend to handle relatively small and
homogeneous data sets for which the statistical techniques are appropriate.
Huge amount of data have been collected from scientific domains such as
geosciences, astronomy, etc. A large amount of data sets is being
generated because of the fast numerical simulations in various fields such
as climate and ecosystem modeling, chemical engineering, fluid dynamics,
etc. Following are the applications of data mining in the field of Scientific
Applications −

 Data Warehouses and data preprocessing.

 Graph-based mining.
 Visualization and domain specific knowledge.
Intrusion Detection
Intrusion refers to any kind of action that threatens integrity,
confidentiality, or the availability of network resources. In this world of
connectivity, security has become the major issue. With increased usage of
internet and availability of the tools and tricks for intruding and attacking
network prompted intrusion detection to become a critical component of
network administration. Here is the list of areas in which data mining
technology may be applied for intrusion detection −
 Development of data mining algorithm for intrusion detection.
  Association and correlation analysis, aggregation to help select and
build discriminating attributes.
 Analysis of Stream data.
 Distributed data mining.
 Visualization and query tools.

Data Mining System Products

There are many data mining system products and domain specific
data mining applications. The new data mining systems and applications are
being added to the previous systems. Also, efforts are being made to
standardize data mining languages.

Choosing a Data Mining System

The selection of a data mining system depends on the following features −
 Data Types − The data mining system may handle formatted text,
record-based data, and relational data. The data could also be in
ASCII text, relational database data or data warehouse data.
Therefore, we should check what exact format the data mining
system can handle.
 System Issues − We must consider the compatibility of a data
mining system with different operating systems. One data mining
system may run on only one operating system or on several. There
are also data mining systems that provide web-based user interfaces
and allow XML data as input.
 Data Sources − Data sources refer to the data formats in which data
mining system will operate. Some data mining system may work only
on ASCII text files while others on multiple relational sources. Data
mining system should also support ODBC connections or OLE DB for
ODBC connections.
 Data Mining functions and methodologies − There are some data
mining systems that provide only one data mining function such as
classification while some provides multiple data mining functions such
as concept description, discovery-driven OLAP analysis, association
mining, linkage analysis, statistical analysis, classification, prediction,
clustering, outlier analysis, similarity search, etc.
 Coupling data mining with databases or data warehouse
systems − Data mining systems need to be coupled with a database
or a data warehouse system. The coupled components are integrated
into a uniform information processing environment. Here are the
types of coupling listed below −
 No coupling
o
o Loose Coupling
o Semi tight Coupling
o Tight Coupling
 Scalability − There are two scalability issues in data mining −

o Row (Database size) Scalability − A data mining system is

considered as row scalable when the number or rows are
enlarged 10 times. It takes no more than 10 times to execute a
query.
o Column (Dimension) Salability − A data mining system is
considered as column scalable if the mining query execution
time increases linearly with the number of columns.
 Visualization Tools − Visualization in data mining can be categorized
as follows −
Data Visualization
o
o Mining Results Visualization
o Mining process visualization
o Visual data mining
 Data Mining query language and graphical user interface − An
easy-to-use graphical user interface is important to promote user-
guided, interactive data mining. Unlike relational database systems,
data mining systems do not share underlying data mining query
language.

Trends in Data Mining

Data mining concepts are still evolving and here are the latest trends
that we get to see in this field −
 Application Exploration.
 Scalable and interactive data mining methods.
 Integration of data mining with database systems, data warehouse
systems and web database systems.
 SStandardization of data mining query language.
 Visual data mining.
 New methods for mining complex types of data.
 Biological data mining.
 Data mining and software engineering.
  Web mining.
 Distributed data mining.
 Real time data mining.
 Multi database data mining.
 Privacy protection and information security in data mining.

Theoretical Foundations of Data Mining

The theoretical foundations of data mining includes the following
concepts −
 Data Reduction − The basic idea of this theory is to reduce the data
representation which trades accuracy for speed in response to the
need to obtain quick approximate answers to queries on very large
databases. Some of the data reduction techniques are as follows −
o Singular value Decomposition
o Wavelets
o Regression
o Log-linear models
o Histograms
o Clustering
o Sampling
o Construction of Index Trees
 Data Compression − The basic idea of this theory is to compress the
given data by encoding in terms of the following −
o Bits
o Association Rules
o Decision Trees
o Clusters
 Pattern Discovery − The basic idea of this theory is to discover
patterns occurring in a database. Following are the areas that
contribute to this theory −
o Machine Learning
o Neural Network
o Association Mining
 o Sequential Pattern Matching
o Clustering
 Probability Theory − This theory is based on statistical theory. The
basic idea behind this theory is to discover joint probability
distributions of random variables.
 Probability Theory − According to this theory, data mining finds the
patterns that are interesting only to the extent that they can be used
in the decision-making process of some enterprise.
 Microeconomic View − As per this theory, a database schema
consists of data and patterns that are stored in a database. Therefore,
data mining is the task of performing induction on databases.
 Inductive databases − Apart from the database-oriented
techniques, there are statistical techniques available for data analysis.
These techniques can be applied to scientific data and data from
economic and social sciences as well.

Statistical Data Mining

Some of the Statistical Data Mining Techniques are as follows −
 Regression − Regression methods are used to predict the value of
the response variable from one or more predictor variables where the
variables are numeric. Listed below are the forms of Regression −
o Linear
o Multiple
o Weighted
o Polynomial
o Nonparametric
o Robust
 Generalized Linear Models − Generalized Linear Model includes −
o Logistic Regression
o Poisson Regression
The model's generalization allows a categorical response variable to
be related to a set of predictor variables in a manner similar to the
modelling of numeric response variable using linear regression.
 Analysis of Variance − This technique analyzes −
 o Experimental data for two or more populations described by a
numeric response variable.
o One or more categorical variables (factors).
 Mixed-effect Models − These models are used for analyzing grouped
data. These models describe the relationship between a response
variable and some co-variates in the data grouped according to one or
more factors.
 Factor Analysis − Factor analysis is used to predict a categorical
response variable. This method assumes that independent variables
follow a multivariate normal distribution.
 Time Series Analysis − Following are the methods for analyzing
time-series data −
o Auto-regression Methods.
o Univariate ARIMA (AutoRegressive Integrated Moving Average)
Modeling.
o Long-memory time-series modeling.

Visual Data Mining

Visual Data Mining uses data and/or knowledge visualization
techniques to discover implicit knowledge from large data sets. Visual data
mining can be viewed as an integration of the following disciplines −
 Data Visualization
 Data Mining
Visual data mining is closely related to the following −
 Computer Graphics
 Multimedia Systems
 Human Computer Interaction
 Pattern Recognition
 High-performance Computing
Generally data visualization and data mining can be integrated in the
following ways −
 Data Visualization − The data in a database or a data warehouse
can be viewed in several visual forms that are listed below −
o Boxplots
o 3-D Cubes
 o Data distribution charts
o Curves
o Surfaces
o Link graphs etc.
 Data Mining Result Visualization − Data Mining Result
Visualization is the presentation of the results of data mining in visual
forms. These visual forms could be scattered plots, boxplots, etc.
 Data Mining Process Visualization − Data Mining Process
Visualization presents the several processes of data mining. It allows
the users to see how the data is extracted. It also allows the users to
see from which database or data warehouse the data is cleaned,
integrated, preprocessed, and mined.

Audio Data Mining

Audio data mining makes use of audio signals to indicate the patterns
of data or the features of data mining results. By transforming patterns into
sound and musing, we can listen to pitches and tunes, instead of watching
pictures, in order to identify anything interesting.

Data Mining and Collaborative Filtering

Consumers today come across a variety of goods and services while
shopping. During live customer transactions, a Recommender System helps
the consumer by making product recommendations. The Collaborative
Filtering Approach is generally used for recommending products to
customers. These recommendations are based on the opinions of other
customers.