Book Image

Learning Predictive Analytics with Python

By : Ashish Kumar, Gary Dougan
Book Image

Learning Predictive Analytics with Python

By: Ashish Kumar, Gary Dougan

Overview of this book

Social Media and the Internet of Things have resulted in an avalanche of data. Data is powerful but not in its raw form - It needs to be processed and modeled, and Python is one of the most robust tools out there to do so. It has an array of packages for predictive modeling and a suite of IDEs to choose from. Learning to predict who would win, lose, buy, lie, or die with Python is an indispensable skill set to have in this data age. This book is your guide to getting started with Predictive Analytics using Python. You will see how to process data and make predictive models from it. We balance both statistical and mathematical concepts, and implement them in Python using libraries such as pandas, scikit-learn, and numpy. You’ll start by getting an understanding of the basics of predictive modeling, then you will see how to cleanse your data of impurities and get it ready it for predictive modeling. You will also learn more about the best predictive modeling algorithms such as Linear Regression, Decision Trees, and Logistic Regression. Finally, you will see the best practices in predictive modeling, as well as the different applications of predictive modeling in the modern world.
Table of Contents (19 chapters)
Learning Predictive Analytics with Python
Credits
Foreword
About the Author
Acknowledgments
About the Reviewer
www.PacktPub.com
Preface
A List of Links
Index

Understanding the maths behind linear regression


Let us assume that we have a hypothetical dataset containing information about the costs of several houses and their sizes (in square feet):

Size (square feet) X

Cost (lakh INR) Y

1500

45

1200

38

1700

48

800

27

There are two kinds of variables in a model:

  • The input or predictor variable, the one which helps predict the value of output variable

  • The output variable, the one which is predicted

In this case, cost is the output variable and the size is the input variable. The output and the input variables are generally referred as Y and X respectively.

In the case of linear regression, we assume that Y (Cost) is a linear function of X (Size) and to estimate Y, we write:

Where Y e is the estimated or predicted value of Y based on our linear equation.

The purpose of linear regression is to find statistically significant values of a and ß, which minimize the difference between Y and Y e. If we are able to determine...