Data Mining

Tutorial
Gregory Piatetsky-Shapiro
KDnuggets

© 2006 KDnuggets
Outline
 Introduction
 Data Mining Tasks
 Classification & Evaluation
 Clustering
 Application Examples

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Trends leading to Data Flood
 More data is generated:
 Web, text, images …
 Business transactions, calls,
...
 Scientific data: astronomy,
biology, etc
 More data is captured:
 Storage technology faster
and cheaper
 DBMS can handle bigger DB

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Largest Databases in 2005
Winter Corp. 2005 Commercial
Database Survey:
1. Max Planck Inst. for
Meteorology , 222 TB
2. Yahoo ~ 100 TB (Largest Data
Warehouse)
3. AT&T ~ 94 TB
www.wintercorp.com/VLDB/2005_TopTen_Survey/TopTenWinners_2005.asp

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Data Growth

In 2 years (2003 to 2005),

the size of the largest database TRIPLED!

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Data Growth Rate

 Twice as much information was created in 2002

as in 1999 (~30% growth rate)
 Other growth rate estimates even higher
 Very little data will ever be looked at by a human

Knowledge Discovery is NEEDED to make sense

and use of data.

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Knowledge Discovery Definition
Knowledge Discovery in Data is the
non-trivial process of identifying
 valid
 novel
 potentially useful
 and ultimately understandable patterns in data.
from Advances in Knowledge Discovery and Data Mining,
Fayyad, Piatetsky-Shapiro, Smyth, and Uthurusamy, (Chapter
1), AAAI/MIT Press 1996

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Related Fields

Machine Visualization
Learning
Data Mining and
Knowledge Discovery

Statistics Databases

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Statistics, Machine Learning and
Data Mining
 Statistics:
 more theory-based
 more focused on testing hypotheses
 Machine learning
 more heuristic
 focused on improving performance of a learning agent
 also looks at real-time learning and robotics – areas not part of data mining
 Data Mining and Knowledge Discovery
 integrates theory and heuristics
 focus on the entire process of knowledge discovery, including data
cleaning, learning, and integration and visualization of results
 Distinctions are fuzzy

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Knowledge Discovery Process
flow, according to CRISP-DM

see
Monitoring www.crisp-dm.org
for more
information

Continuous
monitoring and
improvement is
an addition to CRISP

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 Historical Note:
Many Names of Data Mining
 Data Fishing, Data Dredging: 1960-
 used by statisticians (as bad name)

 Data Mining :1990 --

 used in DB community, business

 Knowledge Discovery in Databases (1989-)

 used by AI, Machine Learning Community
 also Data Archaeology, Information Harvesting,
Information Discovery, Knowledge Extraction, ...
Currently: Data Mining and Knowledge Discovery
are used interchangeably
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 Data Mining Tasks

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Some Definitions

 Instance (also Item or Record):

 an example, described by a number of attributes,
 e.g. a day can be described by temperature, humidity
and cloud status

 Attribute or Field
 measuring aspects of the Instance, e.g. temperature

 Class (Label)
 grouping of instances, e.g. days good for playing

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Major Data Mining Tasks
 Classification: predicting an item class
 Clustering: finding clusters in data
 Associations: e.g. A & B & C occur frequently
 Visualization: to facilitate human discovery
 Summarization: describing a group
 Deviation Detection: finding changes
 Estimation: predicting a continuous value
 Link Analysis: finding relationships
…

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Classification
Learn a method for predicting the instance class
from pre-labeled (classified) instances

Many approaches:
Statistics,
Decision Trees,
Neural Networks,
...

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Clustering
Find “natural” grouping of
instances given un-labeled data

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Association Rules &
Frequent Itemsets
Transactions
TID Produce Frequent Itemsets:
1 MILK, BREAD, EGGS
2 BREAD, SUGAR Milk, Bread (4)
3 BREAD, CEREAL
4 MILK, BREAD, SUGAR
Bread, Cereal (3)
5 MILK, CEREAL Milk, Bread, Cereal (2)
6 BREAD, CEREAL …
7 MILK, CEREAL
8 MILK, BREAD, CEREAL, EGGS
9 MILK, BREAD, CEREAL

Rules:
Milk => Bread (66%)

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Visualization & Data Mining
 Visualizing the data to
facilitate human
discovery

 Presenting the
discovered results in a
visually "nice" way

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 Summarization

 Describe features of the

selected group
 Use natural language
and graphics
 Usually in Combination
with Deviation detection
or other methods

Average length of stay in this study area rose 45.7 percent,

from 4.3 days to 6.2 days, because ...
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Data Mining Central Quest

Find true patterns

and avoid overfitting

(finding seemingly signifcant

but really random patterns due
to searching too many possibilites)
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 Classification Methods

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Classification
Learn a method for predicting the instance class
from pre-labeled (classified) instances

Many approaches:
Regression,
Decision Trees,
Bayesian,
Neural Networks,
...

Given a set of points from classes

what is the class of new point ?
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Classification: Linear Regression

 Linear Regression
w0 + w1 x + w2 y >= 0

 Regression computes
wi from data to
minimize squared error
to ‘fit’ the data
 Not flexible enough

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Regression for Classification
 Any regression technique can be used for classification
 Training: perform a regression for each class, setting the
output to 1 for training instances that belong to class, and 0
for those that don’t
 Prediction: predict class corresponding to model with largest
output value (membership value)

 For linear regression this is known as multi-response

linear regression

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Classification: Decision Trees

if X > 5 then blue

else if Y > 3 then blue
Y else if X > 2 then green
else blue

2 5 X

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DECISION TREE
 An internal node is a test on an attribute.
 A branch represents an outcome of the test, e.g.,
Color=red.
 A leaf node represents a class label or class label
distribution.
 At each node, one attribute is chosen to split training
examples into distinct classes as much as possible
 A new instance is classified by following a matching
path to a leaf node.

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Weather Data: Play or not Play?
Outlook Temperature Humidity Windy Play?
sunny hot high false No
sunny hot high true No
Note:
overcast hot high false Yes Outlook is the
rain mild high false Yes Forecast,
rain cool normal false Yes no relation to
rain cool normal true No Microsoft
overcast cool normal true Yes email program
sunny mild high false No
sunny cool normal false Yes
rain mild normal false Yes
sunny mild normal true Yes
overcast mild high true Yes
overcast hot normal false Yes
rain mild high true No
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Example Tree for “Play?”

Outlook

sunny
overcast rain

Humidity Yes
Windy

high normal true false

No Yes No Yes

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Classification: Neural Nets

 Can select more

complex regions
 Can be more accurate
 Also can overfit the
data – find patterns in
random noise

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Classification: other approaches

 Naïve Bayes
 Rules
 Support Vector Machines
 Genetic Algorithms
…
See www.KDnuggets.com/software/

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 Evaluation

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Evaluating which method works the
best for classification
 No model is uniformly the best
 Dimensions for Comparison
 speed of training
 speed of model application
 noise tolerance
 explanation ability

 Best Results: Hybrid, Integrated models

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Comparison of Major
Classification Approaches

Train Run Noise Can Use Accuracy Under-

time Time Toler Prior on Customer standable
ance Know- Modelling
ledge
Decision fast fast poor no medium medium
Trees
Rules med fast poor no medium good

Neural slow fast good no good poor

Networks
Bayesian slow fast good yes good good

A hybrid method will have higher accuracy

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Evaluation of Classification Models

 How predictive is the model we learned?

 Error on the training data is not a good indicator
of performance on future data
 The new data will probably not be exactly the same as
the training data!

 Overfitting – fitting the training data too precisely

- usually leads to poor results on new data

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Evaluation issues

 Possible evaluation measures:

 Classification Accuracy
 Total cost/benefit – when different errors involve
different costs
 Lift and ROC curves
 Error in numeric predictions

 How reliable are the predicted results ?

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Classifier error rate

 Natural performance measure for classification

problems: error rate
 Success: instance’s class is predicted correctly
 Error: instance’s class is predicted incorrectly
 Error rate: proportion of errors made over the whole
set of instances

 Training set error rate: is way too optimistic!

 you can find patterns even in random data

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Evaluation on “LARGE” data

If many (>1000) examples are available,

including >100 examples from each class
 A simple evaluation will give useful results
 Randomly split data into training and test sets (usually
2/3 for train, 1/3 for test)

 Build a classifier using the train set and evaluate

it using the test set

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 Classification Step 1:
Split data into train and test sets
THE PAST
Results Known

+
+ Training set
-
-
+
Data

Testing set

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 Classification Step 2:
Build a model on a training set
THE PAST
Results Known

+
+ Training set
-
-
+
Data

Model Builder

Testing set

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 Classification Step 3:
Evaluate on test set (Re-
train?)
Results Known
+
+ Training set
-
-
+
Data

Model Builder
Evaluate
Predictions
+
Y N
-
+
Testing set -

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Unbalanced data

 Sometimes, classes have very unequal frequency

 Attrition prediction: 97% stay, 3% attrite (in a month)
 medical diagnosis: 90% healthy, 10% disease
 eCommerce: 99% don’t buy, 1% buy
 Security: >99.99% of Americans are not terrorists

 Similar situation with multiple classes

 Majority class classifier can be 97% correct, but
useless

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Handling unbalanced data –
how?
If we have two classes that are very
unbalanced, then how can we evaluate our
classifier method?

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Balancing unbalanced data, 1

 With two classes, a good approach is to build

BALANCED train and test sets, and train model
on a balanced set
 randomly select desired number of minority class
instances
 add equal number of randomly selected majority class

 How do we generalize “balancing” to multiple

classes?

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 Balancing unbalanced data, 2

 Generalize “balancing” to multiple classes

 Ensure that each class is represented with
approximately equal proportions in train and test

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A note on parameter tuning
 It is important that the test data is not used in any way to
create the classifier
 Some learning schemes operate in two stages:
 Stage 1: builds the basic structure
 Stage 2: optimizes parameter settings

 The test data can’t be used for parameter tuning!

 Proper procedure uses three sets: training data,
validation data, and test data
 Validation data is used to optimize parameters

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Making the most of the data

 Once evaluation is complete, all the data can be

used to build the final classifier
 Generally, the larger the training data the better
the classifier (but returns diminish)
 The larger the test data the more accurate the
error estimate

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 Classification:
Train, Validation, Test split
Results Known
+
Training set Model
+
-
-
Builder
+
Data
Evaluate
Model Builder
Predictions
+
-
Y N +
Validation set -

+
- Final Evaluation
+
Final Test Set Final Model -

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Cross-validation

 Cross-validation avoids overlapping test sets

 First step: data is split into k subsets of equal size
 Second step: each subset in turn is used for testing and
the remainder for training

 This is called k-fold cross-validation

 Often the subsets are stratified before the cross-
validation is performed
 The error estimates are averaged to yield an
overall error estimate
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 Cross-validation example:
—Break up data into groups of the same size
—
—

—Hold aside one group for testing and use the rest to build model

— Test
—Repeat

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More on cross-validation

 Standard method for evaluation: stratified ten-

fold cross-validation
 Why ten? Extensive experiments have shown that
this is the best choice to get an accurate estimate
 Stratification reduces the estimate’s variance
 Even better: repeated stratified cross-validation
 E.g. ten-fold cross-validation is repeated ten times and
results are averaged (reduces the variance)

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Direct Marketing Paradigm
 Find most likely prospects to contact
 Not everybody needs to be contacted
 Number of targets is usually much smaller than number of
prospects

 Typical Applications
 retailers, catalogues, direct mail (and e-mail)
 customer acquisition, cross-sell, attrition prediction
 ...

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Direct Marketing Evaluation

 Accuracy on the entire dataset is not the

right measure
 Approach
 develop a target model
 score all prospects and rank them by decreasing score
 select top P% of prospects for action

 How do we decide what is the best subset of

prospects ?

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Model-Sorted List
Use a model to assign score to each customer
Sort customers by decreasing score
Expect more targets (hits) near the top of the list
No Score Target CustID Age
1 0.97 Y 1746 … 3 hits in top 5% of
the list
2 0.95 N 1024 …
3 0.94 Y 2478 … If there 15 targets
overall, then top 5
4 0.93 Y 3820 …
has 3/15=20% of
5 0.92 N 4897 … targets
… … … …
99 0.11 N 2734 …
100 0.06 N 2422
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 CPH (Cumulative Pct Hits)
100

Cumulative % Hits
90
Definition: 80
CPH(P,M) 70
= % of all targets 60
Random
50
in the first P% 40
of the list scored 30
20
by model M 10
CPH frequently 0
called Gains
5

15

35

75
25

45

55

65

85

95
Pct list
5% of random list have 5% of targets

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 CPH: Random List vs
Model-ranked list
100

Cumulative % Hits
90
80
70
60 Random
50 Model
40
30
20
10
0
5

15

25

35

45

55

65

75

85

95
Pct list
5% of random list have 5% of targets,
but 5% of model ranked list have 21% of targets
CPH(5%,model)=21%.

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 Lift
Lift(P,M) = CPH(P,M) / P

Lift (at 5%) 4.5

4
= 21% / 5%
3.5
= 4.2 3
better 2.5 Lift
than random 2
1.5
1
0.5
Note: Some authors
use “Lift” for what 0
5

45

55

65

75

85

95
15

25

35

we call CPH.
P -- percent of the list
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Lift – a measure of model quality

 Lift helps us decide which models are better

 If cost/benefit values are not available or
changing, we can use Lift to select a better
model.
 Model with the higher Lift curve will generally be
better

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 Clustering

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Clustering
Unsupervised learning:
Finds “natural” grouping of
instances given un-labeled data

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Clustering Methods
 Many different method and algorithms:
 For numeric and/or symbolic data
 Deterministic vs. probabilistic
 Exclusive vs. overlapping
 Hierarchical vs. flat
 Top-down vs. bottom-up

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Clustering Evaluation

 Manual inspection
 Benchmarking on existing labels
 Cluster quality measures
 distance measures
 high similarity within a cluster, low across clusters

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The distance function

 Simplest case: one numeric attribute A

 Distance(X,Y) = A(X) – A(Y)

 Several numeric attributes:

 Distance(X,Y) = Euclidean distance between X,Y

 Nominal attributes: distance is set to 1 if values

are different, 0 if they are equal
 Are all attributes equally important?
 Weighting the attributes might be necessary

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Simple Clustering: K-means
Works with numeric data only
1) Pick a number (K) of cluster centers (at
random)
2) Assign every item to its nearest cluster center
(e.g. using Euclidean distance)
3) Move each cluster center to the mean of its
assigned items
4) Repeat steps 2,3 until convergence (change in
cluster assignments less than a threshold)

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 K-means example, step 1

c1
Y
Pick 3 c2
initial
cluster
centers
(randomly)
c3

X
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 K-means example, step 2

c1
Y

c2
Assign
each point
to the closest
cluster
center c3

X
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 K-means example, step 3

c1 c1
Y

Move c2
each cluster
center c3
c2
to the mean
of each cluster c3

X
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 K-means example, step 4a

Reassign c1
points Y
closest to a
different new
cluster center
c3
Q: Which c2
points are
reassigned?

X
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 K-means example, step 4b

c1
Y
A: these
three points
c3
c2

X
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 K-means example, step 5a

c1
Y
re-compute
cluster
means c3
c2

X
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 K-means example, step 5b

c1
Y

c2
move cluster
centers to c3
cluster means

X
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 Data Mining Applications

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Problems Suitable for Data-Mining

 require knowledge-based decisions

 have a changing environment
 have sub-optimal current methods
 have accessible, sufficient, and relevant data
 provides high payoff for the right decisions!

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Major Application Areas for
Data Mining Solutions
 Advertising
 Bioinformatics
 Customer Relationship Management (CRM)
 Database Marketing
 Fraud Detection
 eCommerce
 Health Care
 Investment/Securities
 Manufacturing, Process Control
 Sports and Entertainment
 Telecommunications
 Web

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Application: Search Engines

 Before Google, web search engines used mainly

keywords on a page – results were easily subject
to manipulation
 Google's early success was partly due to its
algorithm which uses mainly links to the page
 Google founders Sergey Brin and Larry Page were
students at Stanford in 1990s
 Their research in databases and data mining led
to Google
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Microarrays: Classifying Leukemia
 Leukemia: Acute Lymphoblastic (ALL) vs Acute
Myeloid (AML), Golub et al, Science, v.286, 1999
 72 examples (38 train, 34 test), about 7,000 genes

ALL AML

Visually similar, but genetically very different

Best Model: 97% accuracy,

1 error (sample suspected mislabelled)
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Microarray Potential Applications
 New and better molecular diagnostics
 Jan 11, 2005: FDA approved Roche Diagnostic AmpliChip, based
on Affymetrix technology
 New molecular targets for therapy
 few new drugs, large pipeline, …
 Improved treatment outcome
 Partially depends on genetic signature
 Fundamental Biological Discovery
 finding and refining biological pathways
 Personalized medicine ?!

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 Application:
Direct Marketing and CRM
 Most major direct marketing companies are using
modeling and data mining
 Most financial companies are using customer
modeling
 Modeling is easier than changing customer
behaviour
 Example
 Verizon Wireless reduced customer attrition rate from
2% to 1.5%, saving many millions of $
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Application: e-Commerce

 Amazon.com recommendations
 if you bought (viewed) X, you are likely to buy Y

 Netflix
 If you liked "Monty Python and the Holy Grail",
you get a recommendation for "This is Spinal Tap"

 Comparison shopping
 Froogle, mySimon, Yahoo Shopping, …

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Application:
Security and Fraud Detection
 Credit Card Fraud Detection
 over 20 Million credit cards protected by
Neural networks (Fair, Isaac)

 Securities Fraud Detection

 NASDAQ KDD system

 Phone fraud detection

 AT&T, Bell Atlantic, British Telecom/MCI

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Data Mining, Privacy, and Security

 TIA: Terrorism (formerly Total) Information

Awareness Program –
 TIA program closed by Congress in 2003 because of
privacy concerns

 However, in 2006 we learn that NSA is analyzing

US domestic call info to find potential terrorists
 Invasion of Privacy or Needed Intelligence?

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Criticism of Analytic Approaches
to Threat Detection:
Data Mining will
 be ineffective - generate millions of false positives
 and invade privacy

First, can data mining be effective?

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Can Data Mining and Statistics
be Effective for Threat Detection?
 Criticism: Databases have 5% errors, so
analyzing 100 million suspects will generate 5
million false positives
 Reality: Analytical models correlate many items of
information to reduce false positives.
 Example: Identify one biased coin from 1,000.
 After one throw of each coin, we cannot
 After 30 throws, one biased coin will stand out with
high probability.
 Can identify 19 biased coins out of 100 million with
sufficient number of throws

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 Another Approach: Link Analysis

Can find unusual patterns in the network structure

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Analytic technology can be effective

 Data Mining is just one additional tool to help

analysts
 Combining multiple models and link analysis can
reduce false positives
 Today there are millions of false positives with
manual analysis
 Analytic technology has the potential to reduce
the current high rate of false positives

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Data Mining with Privacy

 Data Mining looks for patterns, not people!

 Technical solutions can limit privacy invasion
 Replacing sensitive personal data with anon. ID
 Give randomized outputs
 Multi-party computation – distributed data
…

 Bayardo & Srikant, Technological Solutions for

Protecting Privacy, IEEE Computer, Sep 2003

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The Hype Curve for
Data Mining and Knowledge
Discovery
Over-inflated
expectations

Growing acceptance
and mainstreaming
rising
expectations

Disappointment Performance

Expectations
1990
1998 2000 2002
2005
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Summary

 Data Mining and Knowledge Discovery are needed

to deal with the flood of data
 Knowledge Discovery is a process !
 Avoid overfitting (finding random patterns by
searching too many possibilities)

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Additional Resources
www.KDnuggets.com
data mining software, jobs, courses, etc

www.acm.org/sigkdd
ACM SIGKDD – the professional society for
data mining

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