Using Neural Networks in Database Mining

Tino JimenezCS157B

MW 9-10:15February 19, 2009

Data Mining Overview

What is Data Mining? The process of extracting values from a

database

Why do we need/use it? Predictive technology Allows for automated decision making

Data Mining Overview (continued)

What problems does it solve? Stock Market prediction Credit card fraud Loan approval/denial

How does it work? Data analysis of a given set of

information

Data Mining Tools

Decision Trees A series of rules that allows for

automated decision. Common use: credit card and health insurance approvals

Regression Analysis of the association between a

dependent variable and an independent variable. Common use: prediction

Neural Networks

The Basis of Neural Networks

Adapted from the research of Artificial Intelligence

Based loosely on the biological functionality of neurons

Mimics the ability to “learn”A neuron is a specialized cell that sends

an electrochemical signal

The Basis of Neural Networks (cont.)

Each neuron has a specific function and is grouped with other neurons to be able to perform complex tasks

Each neuron has a “weight” which is a determining factor in the importance of the specific function being processed

How Neural Networks Work

An individual neuron has a step activation function which means that it can have either a -1,0 or 1 value. A value of -1 means that it is an inhibitor and

will lessen the weight of the combined neuronsThe individual neurons are the connected

to each other as inputs and outputs. The inputs carry the values of variables of

interest The outputs form predictions or control signals

How Neural Networks Work (cont.)

Feedforward Structure The most useful in solving real-world problems Signals flow from inputs through hidden units,

eventually to the output units Input layer is used only to introduce the values

of the input variables The hidden and output layer neurons are each

connected to the all of the units of the preceding layer

How Neural Networks Work (cont.)

When the network is used, the variable values are placed in the input units and each subsequent layer, calculates the weighted sum of the outputs of the preceding layer until reaching the final layer.

How Do You Apply a Neural Network

Exact nature of inputs and outputs will be unknown

Large quantities of data are necessary Data can be “noisy”

2 ways to set-up the network Supervised Learning Unsupervised Learning

Supervised Learning

Data involves historical data sets containing input variables, which correspond to an output

Uses training and testing data to build a model The training data is what the neural network

uses to “learn” how to predict the known output. Also used for validation Famous algorithm is back propagation Uses the data to adjust the weights to minimize the error

in its predictions.

Unsupervised Learning

Very uncommon to use

Attempts to locate clusters within the input data regardless of variable Supervised Learning only uses input variables

from a training set

Advantages to Using a Neural Network

High Accuracy Able to approx. complex non-linear mapping

Noise Tolerance Flexible with respect to missing and noisy data

Ease of maintenance Can be implemented in parallel hardware Can be updated with new data, making them

dynamic

Disadvantages to Using a Neural Network

Poor Transparency Operate as “black boxes” with little/no

knowledge of the algorithms used

Trial-and-Error Design The selection of hidden nodes and training

parameters are heuristic

Data Hungry Requires large amounts of data to be accurate

which also means more computing power

Applications of Neural Networks

Detection of medical phenomena Recognizes predictive patterns to prescribe

appropriate treatment

Stock market prediction Large numbers of factors are introduced and

used by technical analysts

Credit assignment Identifies most relevant characteristics and

classifies applicants as good or bad credit risks