Data Mining:

Concepts and Techniques

1
 Chapter 1. Introduction

 Motivation: Why data mining?

 What is data mining?
 Data Mining: On what kind of data?
 Data mining functionality
 Are all the patterns interesting?
 Classification of data mining systems
 Major issues in data mining

Data Mining: Concepts and Techniques 2

 Motivation: “Necessity is the Mother of
Invention”

 Data explosion problem

◦ Automated data collection tools and mature database technology lead to
tremendous amounts of data stored in databases, data warehouses and
other information repositories
 We are drowning in data, but starving for knowledge!
 Solution: Data warehousing and data mining
◦ Data warehousing and on-line analytical processing

◦ Extraction of interesting knowledge (rules, regularities, patterns,

constraints) from data in large databases

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 Evolution of Database Technology

 1960s:
◦ Data collection, database creation, IMS and network DBMS
 1970s:
◦ Relational data model, relational DBMS implementation
 1980s:
◦ RDBMS, advanced data models (extended-relational, OO, deductive, etc.)
and application-oriented DBMS (spatial, scientific, engineering, etc.)
 1990s—2000s:
◦ Data mining and data warehousing, multimedia databases, and Web
databases

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 What Is Data Mining?

 Data mining (knowledge discovery in databases):

◦ Extraction of interesting (non-trivial, implicit, previously
unknown and potentially useful) information or patterns from
data in large databases
 Alternative names and their “inside stories”:
◦ Data mining: a misnomer?
◦ Knowledge discovery(mining) in databases (KDD), knowledge
extraction, data/pattern analysis, data archeology, data dredging,
information harvesting, business intelligence, etc.
 What is not data mining?
◦ (Deductive) query processing.
◦ Expert systems or small ML/statistical programs
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 Why Data Mining? — Potential
Applications

 Database analysis and decision support

◦ Market analysis and management
 target marketing, customer relation management, market basket
analysis, cross selling, market segmentation
◦ Risk analysis and management
 Forecasting, customer retention, improved underwriting, quality
control, competitive analysis
◦ Fraud detection and management
 Other Applications
◦ Text mining (news group, email, documents) and Web analysis.
◦ Intelligent query answering
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 Market Analysis and Management (1)

 Where are the data sources for analysis?

◦ Credit card transactions, loyalty cards, discount coupons, customer
complaint calls, plus (public) lifestyle studies
 Target marketing
◦ Find clusters of “model” customers who share the same characteristics:
interest, income level, spending habits, etc.
 Determine customer purchasing patterns over time
◦ Conversion of single to a joint bank account: marriage, etc.
 Cross-market analysis
◦ Associations/co-relations between product sales
◦ Prediction based on the association information

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 Market Analysis and Management (2)

 Customer profiling
◦ data mining can tell you what types of customers buy what products
(clustering or classification)
 Identifying customer requirements
◦ identifying the best products for different customers
◦ use prediction to find what factors will attract new customers
 Provides summary information
◦ various multidimensional summary reports
◦ statistical summary information (data central tendency and variation)
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 Corporate Analysis and Risk
Management

 Finance planning and asset evaluation

◦ cash flow analysis and prediction
◦ contingent claim analysis to evaluate assets
◦ cross-sectional and time series analysis (financial-ratio, trend analysis,
etc.)
 Resource planning:
◦ summarize and compare the resources and spending
 Competition:
◦ monitor competitors and market directions
◦ group customers into classes and a class-based pricing procedure
◦ set pricing strategy in a highly competitive market

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 Fraud Detection and Management (1)

 Applications
◦ widely used in health care, retail, credit card services,
telecommunications (phone card fraud), etc.
 Approach
◦ use historical data to build models of fraudulent behavior and use data
mining to help identify similar instances
 Examples
◦ auto insurance: detect a group of people who stage accidents to collect
on insurance
◦ money laundering: detect suspicious money transactions (US Treasury's
Financial Crimes Enforcement Network)
◦ medical insurance: detect professional patients and ring of doctors and
ring of references
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 Fraud Detection and Management (2)
 Detecting inappropriate medical treatment
◦ Australian Health Insurance Commission identifies that in many cases
blanket screening tests were requested (save Australian $1m/yr).
 Detecting telephone fraud
◦ Telephone call model: destination of the call, duration, time of day or
week. Analyze patterns that deviate from an expected norm.
◦ British Telecom identified discrete groups of callers with frequent intra-
group calls, especially mobile phones, and broke a multimillion dollar
fraud.
 Retail
◦ Analysts estimate that 38% of retail shrink is due to dishonest
employees.

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 Other Applications

 Sports
◦ IBM Advanced Scout analyzed NBA game statistics (shots blocked,
assists, and fouls) to gain competitive advantage for New York Knicks
and Miami Heat
 Astronomy
◦ JPL and the Palomar Observatory discovered 22 quasars with the help
of data mining
 Internet Web Surf-Aid
◦ IBM Surf-Aid applies data mining algorithms to Web access logs for
market-related pages to discover customer preference and behavior
pages, analyzing effectiveness of Web marketing, improving Web site
organization, etc.
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 Data Mining: A KDD Process

Pattern Evaluation
◦ Data mining: the core of
knowledge discovery
process. Data Mining

Task-relevant Data

Data Selection
Warehouse
Data Cleaning

Data Integration

Databases
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 Steps of a KDD Process

Data Cleaning: To remove noise and

inconsistent data.
Data Integration: Data from multiple data
sources may be combined.
Data Selection: Data relevant to the analysis
task are retrieved from the database.
Data Transformation: Data are transformed or
consolidated into forms appropriate for mining
by performing aggregation operations.
The above mentioned steps are different forms
of Data Preprocessing, where the data are
prepared for Mining.

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Contd…
Data Mining: An essential process where
intelligent methods are applied in order to
extract data patterns.
Pattern Evaluation: To identify the truly
interesting patterns representing knowledge
based on some interestingness measures.
Knowledge Presentation: Visualization and
knowledge representation techniques are
used to present the mined knowledge to the
User.

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Data Mining and Business Intelligence
Increasing potential
to support
business decisions End User
Making
Decisions

Data Presentation Business

Analyst
Visualization Techniques
Data Mining Data
Information Discovery Analyst

Data Exploration
Statistical Analysis, Querying and Reporting

Data Warehouses / Data Marts

OLAP, MDA DBA
Data Sources
Paper, Files, Information Providers, Database Systems, OLTP
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Architecture of a Typical Data
Mining System
Graphical user interface

Pattern evaluation

Data mining engine

Knowledge-base
Database or data
warehouse server
Data cleaning & data integration Filtering

Data
Databases Warehouse

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 Contd…

 Database, Data warehouse, World wide web:

 set of databases, data warehouse, spreadsheets or other kind of
information repositories.
 Data cleaning and Data Integration techniques may be
performed on the data.
 Database or Data warehouse Server:
 These are responsible for fetching the relevant data, based on
the user’s data mining request.
 Knowledge Base:
 This is the Domain knowledge that is used to guide the search
or evaluate the interestingness of resulting patterns.

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Contd…
Data Mining Engine:
 Essential for Data Mining Systems.
 Consist of a set of functional modules for
tasks such as Association, Classification,
Prediction, Cluster analysis, outlier analysis
and evolution analysis.
 Pattern Evaluation Module:
 For efficient data mining, it is highly
recommended to push the evaluation of
pattern interestingness as deep as possible
into the mining process so as to confine the
search to only the interesting patterns.
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Contd…
User Interface:
Communicates between Users and the
Data Mining System, allowing the user to
interact with the system by specifying a
data mining query or task.
This also allows the user to browse
database and data warehouse schemas,
evaluate mined patterns, and visualize the
patterns in different forms.
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 Data Mining: On What Kind of Data?

Relationaldatabases
Data warehouses
Transactional databases
Advanced DB and information repositories
◦ Object-oriented and object-relational databases
◦ Spatial databases
◦ Time-series data and temporal data
◦ Text databases and multimedia databases
◦ Heterogeneous and legacy databases
◦ WWW
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 Data Mining Functionalities (1)
 Concept description: Characterization and
discrimination
◦ Data can be associated with Classes or concepts.
◦ Useful to describe individual class in Generalize,
summarize, and contrast data characteristics, e.g., dry vs. wet
regions
◦ Data Characterization: Summarizing the data of the class
under study in general terms.
◦ Data Discrimination: Comparison of the general features of
target class data objects with the general features of objects
from one or a set of contrasting classes.

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Contd…
Association (correlation and causality)
◦ age(X, “20..29”) ^ income(X, “20..29K”) 
buys(X, “PC”) [support = 2%, confidence =
60%]. This is called as Multi dimensional
Association.
◦ contains(T, “computer”)  contains(x,
“software”) [1%, 75%]. This is called as
Single Association.

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 Data Mining Functionalities (2)

 Classification and Prediction

◦ Finding models (functions) that describe and distinguish classes or
concepts for future prediction
◦ E.g., classify countries based on climate, or classify cars based on gas
mileage
◦ Presentation: decision-tree, classification rule, neural network
◦ Prediction: Predict some unknown or missing numerical values
 Cluster analysis
◦ Class label is unknown: Group data to form new classes, e.g., cluster
houses to find distribution patterns
◦ Clustering based on the principle: maximizing the intra-class similarity
and minimizing the interclass similarity
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 Data Mining Functionalities (3)

 Outlier analysis
◦ Outlier: a data object that does not comply with the general behavior of the
data
◦ It can be considered as noise or exception but is quite useful in fraud detection,
rare events analysis

 Trend and evolution analysis

◦ Trend and deviation: regression analysis
◦ Sequential pattern mining, periodicity analysis
◦ Similarity-based analysis
 Other pattern-directed or statistical analyses
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 Are All the “Discovered” Patterns
Interesting?
 A data mining system/query may generate thousands of patterns, not all of
them are interesting.
◦ Suggested approach: Human-centered, query-based, focused mining
 Interestingness measures: A pattern is interesting if it is easily understood
by humans, valid on new or test data with some degree of certainty,
potentially useful, novel, or validates some hypothesis that a user seeks to
confirm
 Objective vs. subjective interestingness measures:
◦ Objective: based on statistics and structures of patterns, e.g., support, confidence,
etc.
◦ Subjective: based on user’s belief in the data, e.g., unexpectedness, novelty,
actionability, etc.
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 Can We Find All and Only Interesting
Patterns?

 Find all the interesting patterns: Completeness

◦ Can a data mining system find all the interesting patterns?
◦ Association vs. classification vs. clustering
 Search for only interesting patterns: Optimization
◦ Can a data mining system find only the interesting patterns?
◦ Approaches
 First generate all the patterns and then filter out the uninteresting
ones.
 Generate only the interesting patterns—mining query optimization

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 Data Mining: Confluence of Multiple
Disciplines
Database
Statistics
Technology

Machine
Learning
Data Mining Visualization

Information Other
Science Disciplines

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 Data Mining: Classification Schemes

General functionality
◦ Descriptive data mining
◦ Predictive data mining
Different views, different classifications
◦ Kinds of databases to be mined
◦ Kinds of knowledge to be discovered
◦ Kinds of techniques utilized
◦ Kinds of applications adapted
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 A Multi-Dimensional View of Data
Mining Classification
 Databases to be mined
◦ Relational, transactional, object-oriented, object-relational, active, spatial,
time-series, text, multi-media, heterogeneous, legacy, WWW, etc.
 Knowledge to be mined
◦ Characterization, discrimination, association, classification, clustering,
trend, deviation and outlier analysis, etc.
◦ Multiple/integrated functions and mining at multiple levels
 Techniques utilized
◦ Database-oriented, data warehouse (OLAP), machine learning, statistics,
visualization, neural network, etc.
 Applications adapted
◦ Retail, telecommunication, banking, fraud analysis, DNA mining, stock market
analysis, Web mining, Weblog analysis, etc.
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 OLAP Mining: An Integration of Data
Mining and Data Warehousing

 Data mining systems, DBMS, Data warehouse systems

coupling
◦ No coupling, loose-coupling, semi-tight-coupling, tight-coupling
 On-line analytical mining data
◦ integration of mining and OLAP technologies
 Interactive mining multi-level knowledge
◦ Necessity of mining knowledge and patterns at different levels of
abstraction by drilling/rolling, pivoting, slicing/dicing, etc.
 Integration of multiple mining functions
◦ Characterized classification, first clustering and then association
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 An OLAM Architecture
Mining query Mining result Layer4
User Interface
User GUI API
Layer3
OLAM OLAP
Engine Engine OLAP/OLAM

Data Cube API

Layer2
MDDB
MDDB
Meta
Data
Filtering&Integration Database API Filtering
Layer1
Data cleaning Data
Databases Data
Data integration Warehouse
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Techniques 46
 Major Issues in Data Mining (1)

 Mining methodology and user interaction

◦ Mining different kinds of knowledge in databases
◦ Interactive mining of knowledge at multiple levels of abstraction
◦ Incorporation of background knowledge
◦ Data mining query languages and ad-hoc data mining
◦ Expression and visualization of data mining results
◦ Handling noise and incomplete data
◦ Pattern evaluation: the interestingness problem
 Performance and scalability
◦ Efficiency and scalability of data mining algorithms
◦ Parallel, distributed and incremental mining methods
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 Major Issues in Data Mining (2)

 Issues relating to the diversity of data types

◦ Handling relational and complex types of data
◦ Mining information from heterogeneous databases and global information
systems (WWW)
 Issues related to applications and social impacts
◦ Application of discovered knowledge
 Domain-specific data mining tools
 Intelligent query answering
 Process control and decision making
◦ Integration of the discovered knowledge with existing knowledge: A
knowledge fusion problem
◦ Protection of data security, integrity, and privacy
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