Book Image

Practical Data Analysis Cookbook

By : Tomasz Drabas
Book Image

Practical Data Analysis Cookbook

By: Tomasz Drabas

Overview of this book

Data analysis is the process of systematically applying statistical and logical techniques to describe and illustrate, condense and recap, and evaluate data. Its importance has been most visible in the sector of information and communication technologies. It is an employee asset in almost all economy sectors. This book provides a rich set of independent recipes that dive into the world of data analytics and modeling using a variety of approaches, tools, and algorithms. You will learn the basics of data handling and modeling, and will build your skills gradually toward more advanced topics such as simulations, raw text processing, social interactions analysis, and more. First, you will learn some easy-to-follow practical techniques on how to read, write, clean, reformat, explore, and understand your data—arguably the most time-consuming (and the most important) tasks for any data scientist. In the second section, different independent recipes delve into intermediate topics such as classification, clustering, predicting, and more. With the help of these easy-to-follow recipes, you will also learn techniques that can easily be expanded to solve other real-life problems such as building recommendation engines or predictive models. In the third section, you will explore more advanced topics: from the field of graph theory through natural language processing, discrete choice modeling to simulations. You will also get to expand your knowledge on identifying fraud origin with the help of a graph, scrape Internet websites, and classify movies based on their reviews. By the end of this book, you will be able to efficiently use the vast array of tools that the Python environment has to offer.
Table of Contents (19 chapters)
Practical Data Analysis Cookbook
Credits
About the Author
Acknowledgments
About the Reviewers
www.PacktPub.com
Preface
Index

Identifying and tackling multicollinearity


Multicollinearity is a situation where one (or more) of independent variables can be expressed as a linear combination of some other independent variables.

For example, consider a situation where we try to predict the power consumption for a state using population, number of households, and number of power plants located in the state. In a situation like this, one might clearly deduce that the more people living in the state, the higher number of households one might expect, that is, the number of households can be represented by some (close to) linear relationship of the state's population.

Now, if we were to estimate a model based on a data that is collinear, very good chances are that one (or even all the variables that are collinear) will turn out as insignificant. In contrast, removing the collinear variables (and keeping only the variable that is the most correlated with our dependent variable, that is, explains most of its variation) will not...