Data Analysis and Interpretation
Data Analysis and Interpretation
Data Analysis and Interpretation
Data analysis
Analysis of data is a process of inspecting, cleaning, transforming, and modeling
data with the goal of discovering useful information, suggesting conclusions, and
supporting decision-making. Data analysis has multiple facets and approaches,
encompassing diverse techniques under a variety of names, in different business, science,
and social science domains.
Data mining is a particular data analysis technique that focuses on modeling and knowledge
discovery for predictive rather than purely descriptive purposes. Business intelligence covers
data analysis that relies heavily on aggregation, focusing on business information. In
statistical applications, some people divide data analysis into descriptive statistics,
exploratory data analysis (EDA), and confirmatory data analysis (CDA). EDA focuses on
discovering new features in the data and CDA on confirming or falsifying existing
hypotheses. Predictive analytics focuses on application of statistical models for predictive
forecasting or classification, while text analytics applies statistical, linguistic, and structural
techniques to extract and classify information from textual sources, a species of
unstructured data. All are varieties of data analysis.
Data integration is a precursor to data analysis, and data analysis is closely linked to data
visualization and data dissemination. The term data analysis is sometimes used as a
synonym for data modeling.
Contents
The process of data analysis
Data requirements
Data collection
Data processing
Data cleaning
Analysis refers to breaking a whole into its separate components for individual examination.
Data analysis is a process for obtaining raw data and converting it into information useful for
decision-making by users. Data is collected and analyzed to answer questions, test
hypotheses or disprove theories.[1]
Statistician John Tukey defined data analysis in 1961 as: "Procedures for analyzing data,
techniques for interpreting the results of such procedures, ways of planning the gathering of
data to make its analysis easier, more precise or more accurate, and all the machinery and
results of (mathematical) statistics which apply to analyzing data."[2]
There are several phases that can be distinguished, described below. The phases are
iterative, in that feedback from later phases may result in additional work in earlier phases.[3]
Data requirements
The data necessary as inputs to the analysis are specified based upon the requirements of
those directing the analysis or customers who will use the finished product of the analysis.
The general type of entity upon which the data will be collected is referred to as an
experimental unit (e.g., a person or population of people). Specific variables regarding a
population (e.g., age and income) may be specified and obtained. Data may be numerical or
categorical (i.e., a text label for numbers).[3]
Data collection
Data is collected from a variety of sources. The requirements may be communicated by
analysts to custodians of the data, such as information technology personnel within an
organization. The data may also be collected from sensors in the environment, such as
traffic cameras, satellites, recording devices, etc. It may also be obtained through interviews,
downloads from online sources, or reading documentation.[3]
Data processing
Data initially obtained must be processed or organized for analysis. For instance, this may
involve placing data into rows and columns in a table format for further analysis, such as
within a spreadsheet or statistical software.[3]
Data cleaning
Once processed and organized, the data may be incomplete, contain duplicates, or contain
errors. The need for data cleaning will arise from problems in the way that data is entered
and stored. Data cleaning is the process of preventing and correcting these errors. Common
tasks include record matching, deduplication, and column segmentation.[4] Such data
problems can also be identified through a variety of analytical techniques. For example, with
financial information, the totals for particular variables may be compared against separately
published numbers believed to be reliable.[5] Unusual amounts above or below predetermined thresholds may also be reviewed. There are several types of data cleaning that
depend on the type of data. Quantitative data methods for outlier detection can be used to
get rid of likely incorrectly entered data. Textual data spellcheckers can be used to lessen the
amount of mistyped words, but it is harder to tell if the words themselves are correct.[6]
the data, with some residual error depending on model accuracy (i.e., Data = Model + Error).[1]
Inferential statistics includes techniques to measure relationships between particular
variables. For example, regression analysis may be used to model whether a change in
advertising (independent variable X) explains the variation in sales (dependent variable Y). In
mathematical terms, Y (sales) is a function of X (advertising). It may be described as Y = aX +
b + error, where the model is designed such that a and b minimize the error when the model
predicts Y for a given range of values of X. Analysts may attempt to build models that are
descriptive of the data to simplify analysis and communicate results.[1]
Data product
A data product is a computer application that takes data inputs and generates outputs,
feeding them back into the environment. It may be based on a model or algorithm. An
example is an application that analyzes data about customer purchasing history and
recommends other purchases the customer might enjoy.[3]
Communication
Once the data is analyzed, it may be reported in many formats to the users of the analysis to
support their requirements. The users may have feedback, which results in additional
analysis. As such, much of the analytical cycle is iterative.[3]
When determining how to communicate the results, the analyst may consider data
visualization techniques to help clearly and efficiently communicate the message to the
audience. Data visualization uses information displays such as tables and charts to help
communicate key messages contained in the data. Tables are helpful to a user who might
lookup specific numbers, while charts (e.g., bar charts or line charts) may help explain the
quantitative messages contained in the data.
Quantitative messages
Main article: Data visualization
Author Stephen Few described eight types of quantitative messages that users may attempt
to understand or communicate from a set of data and the associated graphs used to help
communicate the message. Customers specifying requirements and analysts performing the
data analysis may consider these messages during the course of the process.
1. Time-series: A single variable is captured over a period of time, such as the unemployment
rate over a 10-year period. A line chart may be used to demonstrate the trend.
2. Ranking: Categorical subdivisions are ranked in ascending or descending order, such as a
ranking of sales performance (the measure) by sales persons (the category, with each sales
person a categorical subdivision) during a single period. A bar chart may be used to show the
comparison across the sales persons.
3. Part-to-whole: Categorical subdivisions are measured as a ratio to the whole (i.e., a
percentage out of 100%). A pie chart or bar chart can show the comparison of ratios, such as
the market share represented by competitors in a market.
4. Deviation: Categorical subdivisions are compared against a reference, such as a
comparison of actual vs. budget expenses for several departments of a business for a given
time period. A bar chart can show comparison of the actual versus the reference amount.
5. Frequency distribution: Shows the number of observations of a particular variable for given
interval, such as the number of years in which the stock market return is between intervals
such as 0-10%, 11-20%, etc. A histogram, a type of bar chart, may be used for this analysis.
6. Correlation: Comparison between observations represented by two variables (X,Y) to
determine if they tend to move in the same or opposite directions. For example, plotting
unemployment (X) and inflation (Y) for a sample of months. A scatter plot is typically used
for this message.
7. Nominal comparison: Comparing categorical subdivisions in no particular order, such as
the sales volume by product code. A bar chart may be used for this comparison.
8. Geographic or geospatial: Comparison of a variable across a map or layout, such as the
unemployment rate by state or the number of persons on the various floors of a building. A
cartogram is a typical graphic used.[10][11]
Author Jonathan Koomey has recommended a series of best practices for understanding
quantitative data. These include:
Check raw data for anomalies prior to performing your analysis;
Re-perform important calculations, such as verifying columns of data that are formula
driven;
Confirm main totals are the sum of subtotals;
Check relationships between numbers that should be related in a predictable way, such as
The consultants at McKinsey and Company named a technique for breaking a quantitative
problem down into its component parts called the MECE principle. Each layer can be broken
down into its components; each of the sub-components must be mutually exclusive of each
other and collectively add up to the layer above them. The relationship is referred to as
"Mutually Exclusive and Collectively Exhaustive" or MECE. For example, profit by definition
can be broken down into total revenue and total cost. In turn, total revenue can be analyzed
by its components, such as revenue of divisions A, B, and C (which are mutually exclusive of
each other) and should add to the total revenue (collectively exhaustive).
Analysts may use robust statistical measurements to solve certain analytical problems.
Hypothesis testing is used when a particular hypothesis about the true state of affairs is
made by the analyst and data is gathered to determine whether that state of affairs is true or
false. For example, the hypothesis might be that "Unemployment has no effect on inflation",
which relates to an economics concept called the Phillips Curve. Hypothesis testing involves
considering the likelihood of Type I and type II errors, which relate to whether the data
supports accepting or rejecting the hypothesis.
Regression analysis may be used when the analyst is trying to determine the extent to which
independent variable X affects dependent variable Y (e.g., "To what extent do changes in the
unemployment rate (X) affect the inflation rate (Y)?"). This is an attempt to model or fit an
equation line or curve to the data, such that Y is a function of X.
Task
General
Pro Forma
Description
Abstract
Given a set of
specific
1 Retrieve Value cases, find
attributes of
those cases.
Examples
- What is the mileage per gallon
of the Audi TT?
...}?
Given some
2 Filter
concrete
conditions on
high fiber?
attribute
values, find
data cases
C...}?
satisfying
those
conditions.
Compute
Given a set of
data cases,
compute an
aggregate
aggregation function F
of those data
cases.
Find data
cases
highest MPG?
Find
Extremum
within the
data set.
Given a set of
5 Sort
data cases,
rank them
according to
some ordinal
of attribute A?
metric.
Given a set of
data cases
lengths?
and an
6
Determine
attribute of
Range
interest, find
the span of
values of attribute A in
horsepowers?
values within
the set.
Given a set of
data cases
and a
quantitative
attribute of
Characterize
interest,
of values of attribute A
Distribution
characterize
in a set S of data
the
cases?
shoppers?
distribution of
that attributes
carbohydrates in cereals?
values over
the set.
Identify any
anomalies
within a given
Find
Anomalies
set of data
cases with
respect to a
have
expectation,
e.g. statistical
outliers.
Given a set of
9 Cluster
data cases,
find clusters
of similar
attribute
lengths?
similar fat/calories/sugar?
values.
Given a set of
data cases
and two
attributes,
determine
10 Correlate
useful
relationships
between the
values of
those
attributes.
among the audience. Distinguishing fact from opinion, cognitive biases, and innumeracy are
all challenges to sound data analysis.
You are entitled to your own opinion, but you are not entitled to your own facts.
Daniel Patrick Moynihan
answer questions,
support a conclusion or formal opinion, or test hypotheses. Facts by definition are irrefutable,
meaning that any person involved in the analysis should be able to agree upon them. For
example, in August 2010, the Congressional Budget Office (CBO) estimated that extending
the Bush tax cuts of 2001 and 2003 for the 2011-2020 time period would add approximately
$3.3 trillion to the national debt.[15] Everyone should be able to agree that indeed this is what
CBO reported; they can all examine the report. This makes it a fact. Whether persons agree or
disagree with the CBO is their own opinion.
As another example, the auditor of a public company must arrive at a formal opinion on
whether financial statements of publicly traded corporations are "fairly stated, in all material
respects." This requires extensive analysis of factual data and evidence to support their
opinion. When making the leap from facts to opinions, there is always the possibility that the
opinion is erroneous.
Cognitive biases
There are a variety of cognitive biases that can adversely effect analysis. For example,
confirmation bias is the tendency to search for or interpret information in a way that confirms
one's preconceptions. In addition, individuals may discredit information that does not support
their views.
Analysts may be trained specifically to be aware of these biases and how to overcome them.
In his book Psychology of Intelligence Analysis, retired CIA analyst Richards Heuer wrote that
analysts should clearly delineate their assumptions and chains of inference and specify the
degree and source of the uncertainty involved in the conclusions. He emphasized procedures
to help surface and debate alternative points of view.[16]
Innumeracy
Effective analysts are generally adept with a variety of numerical techniques. However,
audiences may not have such literacy with numbers or numeracy; they are said to be
innumerate. Persons communicating the data may also be attempting to mislead or
misinform, deliberately using bad numerical techniques.[17]
For example, whether a number is rising or falling may not be the key factor. More important
may be the number relative to another number, such as the size of government revenue or
spending relative to the size of the economy (GDP) or the amount of cost relative to revenue
in corporate financial statements. This numerical technique is referred to as normalization[5]
or common-sizing. There are many such techniques employed by analysts, whether adjusting
for inflation (i.e., comparing real vs. nominal data) or considering population increases,
demographics, etc. Analysts apply a variety of techniques to address the various quantitative
messages described in the section above.
Analysts may also analyze data under different assumptions or scenarios. For example,
when analysts perform financial statement analysis, they will often recast the financial
statements under different assumptions to help arrive at an estimate of future cash flow,
which they then discount to present value based on some interest rate, to determine the
valuation of the company or its stock. Similarly, the CBO analyzes the effects of various
policy options on the government's revenue, outlays and deficits, creating alternative future
scenarios for key measures.
Other topics
Analytics and business intelligence
Main article: Analytics
Analytics is the "extensive use of data, statistical and quantitative analysis, explanatory and
predictive models, and fact-based management to drive decisions and actions." It is a subset
of business intelligence, which is a set of technologies and processes that use data to
understand and analyze business performance.[18]
Education
In education, most educators have access to a data system for the purpose of analyzing
student data.[19] These data systems present data to educators in an over-the-counter data
format (embedding labels, supplemental documentation, and a help system and making key
package/display and content decisions) to improve the accuracy of educators data
analyses.[20]
Practitioner notes
This section contains rather technical explanations that may assist practitioners but are
beyond the typical scope of a Wikipedia article.
variables are compared with coding schemes of variables external to the data set, and
possibly corrected if coding schemes are not comparable.
Test for common-method variance.
The choice of analyses to assess the data quality during the initial data analysis phase
depends on the analyses that will be conducted in the main analysis phase.[22]
Quality of measurements
The quality of the measurement instruments should only be checked during the initial data
analysis phase when this is not the focus or research question of the study. One should
check whether structure of measurement instruments corresponds to structure reported in
the literature.
There are two ways to assess measurement
Analysis of homogeneity (internal consistency), which gives an indication of the reliability
of a measurement instrument. During this analysis, one inspects the variances of the items
and the scales, the Cronbach's of the scales, and the change in the Cronbach's alpha when
an item would be deleted from a scale.[23]
Initial transformations
After assessing the quality of the data and of the measurements, one might decide to impute
missing data, or to perform initial transformations of one or more variables, although this can
also be done during the main analysis phase.[24]
Possible transformations of variables are:[25]
Square root transformation (if the distribution differs moderately from normal)
Log-transformation (if the distribution differs substantially from normal)
Inverse transformation (if the distribution differs severely from normal)
Make categorical (ordinal / dichotomous) (if the distribution differs severely from normal,
and no transformations help)
Did the implementation of the study fulfill the intentions of the research
design?
One should check the success of the randomization procedure, for instance by checking
whether background and substantive variables are equally distributed within and across
groups.
If the study did not need or use a randomization procedure, one should check the success of
the non-random sampling, for instance by checking whether all subgroups of the population
of interest are represented in sample.
Other possible data distortions that should be checked are:
dropout (this should be identified during the initial data analysis phase)
Item nonresponse (whether this is random or not should be assessed during the initial data
analysis phase)
Treatment quality (using manipulation checks). [26]
Characteristics of data sample
In any report or article, the structure of the sample must be accurately described. It is
especially important to exactly determine the structure of the sample (and specifically the
size of the subgroups) when subgroup analyses will be performed during the main analysis
phase.
The characteristics of the data sample can be assessed by looking at:
Basic statistics of important variables
Scatter plots
Correlations and associations
Cross-tabulations[27]
Final stage of the initial data analysis
During the final stage, the findings of the initial data analysis are documented, and necessary,
preferable, and possible corrective actions are taken.
Also, the original plan for the main data analyses can and should be specified in more detail
or rewritten.
In order to do this, several decisions about the main data analyses can and should be made:
In the case of non-normals: should one transform variables; make variables categorical
(ordinal/dichotomous); adapt the analysis method?
In the case of missing data: should one neglect or impute the missing data; which
Stem-and-leaf displays
Box plots
Nonlinear analysis
Nonlinear analysis will be necessary when the data is recorded from a nonlinear system.
Nonlinear systems can exhibit complex dynamic effects including bifurcations, chaos,
harmonics and subharmonics that cannot be analyzed using simple linear methods.
Nonlinear data analysis is closely related to nonlinear system identification.[31]
It is important to obtain some indication about how generalizable the results are.[34] While
this is hard to check, one can look at the stability of the results. Are the results reliable and
reproducible? There are two main ways of doing this:
Cross-validation: By splitting the data in multiple parts we can check if an analysis (like a
fitted model) based on one part of the data generalizes to another part of the data as well.
Sensitivity analysis: A procedure to study the behavior of a system or model when global
parameters are (systematically) varied. One way to do this is with bootstrapping.
Statistical methods
Many statistical methods have been used for statistical analyses. A very brief list of four of
the more popular methods is:
General linear model: A widely used model on which various methods are based (e.g. t test,
ANOVA, ANCOVA, MANOVA). Usable for assessing the effect of several predictors on one or
more continuous dependent variables.
Generalized linear model: An extension of the general linear model for discrete dependent
variables.
Structural equation modelling: Usable for assessing latent structures from measured
manifest variables.
Item response theory: Models for (mostly) assessing one latent variable from several
binary measured variables (e.g. an exam).
MEPX
See also
Analytics
Business intelligence
Censoring (statistics)
Computational physics
Data acquisition
Data governance
Data mining
Data Presentation Architecture
Data science
Digital signal processing
Dimension reduction
Dimension reduction
Early case assessment
Exploratory data analysis
Fourier analysis
Machine learning
Multilinear PCA
Multilinear subspace learning
Multiway Data Analysis
Nearest neighbor search
nonlinear system identification
Predictive analytics
Principal component analysis
Qualitative research
Scientific computing
Structured data analysis (statistics)
system identification
Test method
Text analytics
Unstructured data
Wavelet
References
Citations
1. ^ a b c Judd, Charles and, McCleland, Gary (1989). Data Analysis. Harcourt Brace
Jovanovich. ISBN0-15-516765-0.
2. ^ John Tukey-The Future of Data Analysis-July 1961
^ a b c d e f g O'Neil, Cathy and, Schutt, Rachel (2014). Doing Data Science. O'Reilly. ISBN978-
3. ^ a b c d e f g O'Neil, Cathy and, Schutt, Rachel (2014). Doing Data Science. O'Reilly. ISBN9781-449-35865-5.
4. ^ "Data Cleaning" . Microsoft Research. Retrieved 26 October 2013.
5. ^ a b c Perceptual Edge-Jonathan Koomey-Best practices for understanding quantitative
data-February 14, 2006
6. ^ Hellerstein, Joseph (27 February 2008). "Quantitative Data Cleaning for Large
Databases"
20. ^ Rankin, J. (2013, March 28). How data Systems & reports can either fight or propagate
the data analysis error epidemic, and how educator leaders can help.
Presentation
conducted from Technology Information Center for Administrative Leadership (TICAL) School
Leadership Summit.
21. ^ Adr, 2008, p. 337.
22. ^ Adr, 2008, p. 338-341.
23. ^ Adr, 2008, p. 341-3342.
24. ^ Adr, 2008, p. 344.
25. ^ Tabachnick & Fidell, 2007, p. 87-88.
26. ^ Adr, 2008, p. 344-345.
27. ^ Adr, 2008, p. 345.
28. ^ Adr, 2008, p. 345-346.
29. ^ Adr, 2008, p. 346-347.
30. ^ Adr, 2008, p. 349-353.
31. ^ Billings S.A. "Nonlinear System Identification: NARMAX Methods in the Time,
Frequency, and Spatio-Temporal Domains". Wiley, 2013
32. ^ Adr, 2008, p. 363.
33. ^ Adr, 2008, p. 361-362.
34. ^ Adr, 2008, p. 368-371.
35. ^ "dotplot designer Official Website" . Retrieved 19 February 2014.
36. ^ "Business Process Management Tool | myInvenio" . My-Invenio. Retrieved 2015-12-04.
Bibliography
Adr, H.J. (2008). Chapter 14: Phases and initial steps in data analysis. In H.J. Adr & G.J.
Mellenbergh (Eds.) (with contributions by D.J. Hand), Advising on Research Methods: A
consultant's companion (pp.333356). Huizen, the Netherlands: Johannes van Kessel
Publishing.
Adr, H.J. (2008). Chapter 15: The main analysis phase. In H.J. Adr & G.J. Mellenbergh
(Eds.) (with contributions by D.J. Hand), Advising on Research Methods: A consultant's
Further reading
Adr, H.J. & Mellenbergh, G.J. (with contributions by D.J. Hand) (2008). Advising on
Research Methods: A consultant's companion. Huizen, the Netherlands: Johannes van
Kessel Publishing.
ASTM International (2002). Manual on Presentation of Data and Control Chart Analysis,
MNL 7A, ISBN 0-8031-2093-1
Juran, Joseph M.; Godfrey, A. Blanton (1999). Juran's Quality Handbook. 5th ed. New York:
McGraw Hill. ISBN 0-07-034003-X
Lewis-Beck, Michael S. (1995). Data Analysis: an Introduction, Sage Publications Inc, ISBN
0-8039-5772-6
NIST/SEMATEK (2008) Handbook of Statistical Methods ,
Pyzdek, T, (2003). Quality Engineering Handbook, ISBN 0-8247-4614-7
Richard Veryard (1984). Pragmatic data analysis. Oxford: Blackwell Scientific Publications.
ISBN 0-632-01311-7
Tabachnick, B.G. & Fidell, L.S. (2007). Using Multivariate Statistics, Fifth Edition. Boston:
Pearson Education, Inc. / Allyn and Bacon, ISBN 978-0-205-45938-4
Vance (September 8, 2011). "Data Analytics: Crunching the Future" . Bloomberg
Businessweek. Retrieved 26 September 2011.
Hair, Joseph (2008). Marketing Research 4th ed. McGraw Hill. Data Analysis: Testing for
Association
ISBN 0-07-340470-5
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