Data Mining Using Recursive Partitioning Peter Westfall With some help from Dr. Barry Macy, Dr. Seul-Hee Yoo, and TTU Institutional Research Business Intelligence = Transforming Business Data into Action What Data? Lots of data. http://www.pcworld.com/news/article/0,aid,11 3170,00.asp Text, numeric, sound, pictures, video. Old and New Learning Paradigms Old: THEORY New: DATA ANALYSIS Data Analysis Theory THEORY DATA ANALYSIS Typical Data Mining Methods • Clustering (eg, customer segmentation) • Affinity (eg, what items do people buy together) • Exception analysis (eg, credit card fraud, terrorism) • Predictive Modeling (eg, deciding loans, predicting employee turnover, predicting likely customers) Recent Horizons in Data Mining • • • • Visualizations Text mining Audio mining Video mining Requirements of DM Tools • Simple (even an MBA can use it) • Actionable results • Flexible, open-ended (“Analysis at the speed of thought”) • Scale-Up: Can handle massive data sets • Drill-Down: Ability to investigate sub-units Recursive Partitioning • • • • A predictive modeling tool Also called “Decision Trees”, “CART” Works by recursively splitting data set Software: – SAS Enterprise Miner – SPSS Clementine – SPLUS – Lots of Freeware – Demo: “Partitionator” of Eureka! Technologies. http://www.eurekatechnologies.com/MoreDetails.aspx Example 1: Survey of Innovative Organizations • Action Orientation: Which management levers lead to better performance? • V24=earned profit in last 5 years: – 1=all five – 2=most of 5 – 3 = some of five – 4 = none of 5 Interesting Variables • V617B = Number of years that elimination of perks for certain groups of people has been in effect • V894A = Percent of workforce involved in SPC/SQC/TQC training – – – – 1=None 2=1-20% … 7=100% Example 2: Texas Tech University Ratings By Thesis Students • Who is satisfied? Who is not satisfied? • Action Orientation – – Improve pockets where students are dissatisfied. – Emulate pockets where students are satisfied. Example 3: Business Dress Styles Rated Lower Rated Dress Types Final Tree – Dress Ratings Questions? Comments? Poison-tipped darts?