Book Image

Data Science Using Python and R

By : Chantal D. Larose, Daniel T. Larose
Book Image

Data Science Using Python and R

By: Chantal D. Larose, Daniel T. Larose

Overview of this book

Data science is hot. Bloomberg named a data scientist as the ‘hottest job in America’. Python and R are the top two open-source data science tools using which you can produce hands-on solutions to real-world business problems, using state-of-the-art techniques. Each chapter in the book presents step-by-step instructions and walkthroughs for solving data science problems using Python and R. You’ll learn how to prepare data, perform exploratory data analysis, and prepare to model the data. As you progress, you’ll explore what are decision trees and how to use them. You’ll also learn about model evaluation, misclassification costs, naïve Bayes classification, and neural networks. The later chapters provide comprehensive information about clustering, regression modeling, dimension reduction, and association rules mining. The book also throws light on exciting new topics, such as random forests and general linear models. The book emphasizes data-driven error costs to enhance profitability, which avoids the common pitfalls that may cost a company millions of dollars. By the end of this book, you’ll have enough knowledge and confidence to start providing solutions to data science problems using R and Python.
Table of Contents (20 chapters)
Free Chapter
1
ABOUT THE AUTHORS
17
INDEX
18
END USER LICENSE AGREEMENT

4.5 BINNING BASED ON PREDICTIVE VALUE

Some algorithms work better with categorical rather than numeric variables, so it may be useful for the analyst to use binning to derive new categorical variables based on how the different sets of values of the numeric predictor behave with respect to the response. For example, take Figure 4.7. To optimize our signal from the data, we ask ourselves: How can we categorize the numerical values of age so that the categories had widely varying response proportions? Clearly, one category would be the customers aged 60 and up, who have a high response proportion. This is in contrast to the middle group (somewhere in the mid‐20s up to 60) which has a low response probability. Finally, there is the youngest group (up to mid‐20s) which also has a high response proportion. Thus, we could define our new variable somewhat as follows (the 27 cutoff is a bit arbitrary; 25 or 26 would also work):

equationage_binned={1:Under272:27to603:60andup}--

Figure...