Cover image for Head First Data Analysis

Book description

Today, interpreting data is a critical decision-making factor for businesses and organizations. If your job requires you to manage and analyze all kinds of data, turn to Head First Data Analysis, where you'll quickly learn how to collect and organize data, sort the distractions from the truth, find meaningful patterns, draw conclusions, predict the future, and present your findings to others. Whether you're a product developer researching the market viability of a new product or service, a marketing manager gauging or predicting the effectiveness of a campaign, a salesperson who needs data to support product presentations, or a lone entrepreneur responsible for all of these data-intensive functions and more, the unique approach in Head First Data Analysis is by far the most efficient way to learn what you need to know to convert raw data into a vital business tool. You'll learn how to:

  • Determine which data sources to use for collecting information

  • Assess data quality and distinguish signal from noise

  • Build basic data models to illuminate patterns, and assimilate new information into the models

  • Cope with ambiguous information

  • Design experiments to test hypotheses and draw conclusions

  • Use segmentation to organize your data within discrete market groups

  • Visualize data distributions to reveal new relationships and persuade others

  • Predict the future with sampling and probability models

  • Clean your data to make it useful

  • Communicate the results of your analysis to your audience

Using the latest research in cognitive science and learning theory to craft a multi-sensory learning experience, Head First Data Analysis uses a visually rich format designed for the way your brain works, not a text-heavy approach that puts you to sleep.

Table of Contents

  1. Head First Data Analysis
  2. Dedication
  3. A Note Regarding Supplemental Files
  4. Advance Praise for Head First Data Analysis
  5. Praise for other Head First books
  6. Author of Head First Data Analysis
  7. How to Use This Book: Intro
    1. Who is this book for?
      1. Who should probably back away from this book?
    2. We know what you’re thinking
    3. We know what your brain is thinking
    4. Metacognition: thinking about thinking
    5. Here’s what WE did
      1. Here’s what YOU can do to bend your brain into submission
    6. Read Me
    7. The technical review team
    8. Acknowledgments
    9. Safari® Books Online
  8. 1. Introduction to Data Analysis: Break it down
    1. Acme Cosmetics needs your help
    2. The CEO wants data analysis to help increase sales
    3. Data analysis is careful thinking about evidence
    4. Define the problem
    5. Your client will help you define your problem
    6. Acme’s CEO has some feedback for you
    7. Break the problem and data into smaller pieces
      1. Divide the problem into smaller problems
      2. Divide the data into smaller chunks
    8. Now take another look at what you know
    9. Evaluate the pieces
    10. Analysis begins when you insert yourself
    11. Make a recommendation
    12. Your report is ready
    13. The CEO likes your work
    14. An article just came across the wire
    15. You let the CEO’s beliefs take you down the wrong path
    16. Your assumptions and beliefs about the world are your mental model
    17. Your statistical model depends on your mental model
    18. Mental models should always include what you don’t know
    19. The CEO tells you what he doesn’t know
    20. Acme just sent you a huge list of raw data
    21. Time to drill further into the data
    22. General American Wholesalers confirms your impression
    23. Here’s what you did
    24. Your analysis led your client to a brilliant decision
  9. 2. Experiments: Test your theories
    1. It’s a coffee recession!
    2. The Starbuzz board meeting is in three months
    3. The Starbuzz Survey
    4. Always use the method of comparison
    5. Comparisons are key for observational data
    6. Could value perception be causing the revenue decline?
    7. A typical customer’s thinking
    8. Observational studies are full of confounders
    9. How location might be confounding your results
    10. Manage confounders by breaking the data into chunks
    11. It’s worse than we thought!
    12. You need an experiment to say which strategy will work best
    13. The Starbuzz CEO is in a big hurry
    14. Starbuzz drops its prices
    15. One month later...
    16. Control groups give you a baseline
    17. Not getting fired 101
    18. Let’s experiment for real!
    19. One month later...
    20. Confounders also plague experiments
    21. Avoid confounders by selecting groups carefully
    22. Randomization selects similar groups
    23. Your experiment is ready to go
    24. The results are in
    25. Starbuzz has an empirically tested sales strategy
  10. 3. Optimization: Take it to the max
    1. You’re now in the bath toy game
    2. Constraints limit the variables you control
    3. Decision variables are things you can control
    4. You have an optimization problem
    5. Find your objective with the objective function
    6. Your objective function
    7. Show product mixes with your other constraints
    8. Plot multiple constraints on the same chart
    9. Your good options are all in the feasible region
    10. Your new constraint changed the feasible region
    11. Your spreadsheet does optimization
    12. Solver crunched your optimization problem in a snap
    13. Profits fell through the floor
    14. Your model only describes what you put into it
    15. Calibrate your assumptions to your analytical objectives
    16. Watch out for negatively linked variables
    17. Your new plan is working like a charm
    18. Your assumptions are based on an ever-changing reality
  11. 4. Data Visualization: Pictures make you smarter
    1. New Army needs to optimize their website
    2. The results are in, but the information designer is out
    3. The last information designer submitted these three infographics
    4. What data is behind the visualizations?
    5. Show the data!
    6. Here’s some unsolicited advice from the last designer
    7. Too much data is never your problem
    8. Making the data pretty isn’t your problem either
    9. Data visualization is all about making the right comparisons
    10. Your visualization is already more useful than the rejected ones
    11. Use scatterplots to explore causes
    12. The best visualizations are highly multivariate
    13. Show more variables by looking at charts together
    14. The visualization is great, but the web guru’s not satisfied yet
    15. Good visual designs help you think about causes
    16. The experiment designers weigh in
    17. The experiment designers have some hypotheses of their own
    18. The client is pleased with your work
    19. Orders are coming in from everywhere!
  12. 5. Hypothesis Testing: Say it ain’t so
    1. Gimme some skin...
    2. When do we start making new phone skins?
    3. PodPhone doesn’t want you to predict their next move
    4. Here’s everything we know
    5. ElectroSkinny’s analysis does fit the data
    6. ElectroSkinny obtained this confidential strategy memo
    7. Variables can be negatively or positively linked
    8. Causes in the real world are networked, not linear
    9. Hypothesize PodPhone’s options
    10. You have what you need to run a hypothesis test
    11. Falsification is the heart of hypothesis testing
    12. Diagnosticity helps you find the hypothesis with the least disconfirmation
    13. You can’t rule out all the hypotheses, but you can say which is strongest
    14. You just got a picture message...
    15. It’s a launch!
  13. 6. Bayesian Statistics: Get past first base
    1. The doctor has disturbing news
    2. Let’s take the accuracy analysis one claim at a time
    3. How common is lizard flu really?
    4. You’ve been counting false positives
      1. The opposite of a false positive is a true negative
    5. All these terms describe conditional probabilities
    6. You need to count
    7. 1 percent of people have lizard flu
      1. Watch out for the base rate fallacy
    8. Your chances of having lizard flu are still pretty low
    9. Do complex probabilistic thinking with simple whole numbers
    10. Bayes’ rule manages your base rates when you get new data
    11. You can use Bayes’ rule over and over
    12. Your second test result is negative
    13. The new test has different accuracy statistics
    14. New information can change your base rate
    15. What a relief!
  14. 7. Subjective Probabilities: Numerical belief
    1. Backwater Investments needs your help
    2. Their analysts are at each other’s throats
    3. Subjective probabilities describe expert beliefs
    4. Subjective probabilities might show no real disagreement after all
    5. The analysts responded with their subjective probabilities
    6. The CEO doesn’t see what you’re up to
    7. The CEO loves your work
    8. The standard deviation measures how far points are from the average
    9. You were totally blindsided by this news
    10. Bayes’ rule is great for revising subjective probabilities
    11. The CEO knows exactly what to do with this new information
    12. Russian stock owners rejoice!
  15. 8. Heuristics: Analyze like a human
    1. LitterGitters submitted their report to the city council
    2. The LitterGitters have really cleaned up this town
    3. The LitterGitters have been measuring their campaign’s effectiveness
    4. The mandate is to reduce the tonnage of litter
    5. Tonnage is unfeasible to measure
    6. Give people a hard question, and they’ll answer an easier one instead
    7. Littering in Dataville is a complex system
    8. You can’t build and implement a unified litter-measuring model
    9. Heuristics are a middle ground between going with your gut and optimization
    10. Use a fast and frugal tree
    11. Is there a simpler way to assess LitterGitters’ success?
    12. Stereotypes are heuristics
    13. Your analysis is ready to present
    14. Looks like your analysis impressed the city council members
  16. 9. Histograms: The shape of numbers
    1. Your annual review is coming up
    2. Going for more cash could play out in a bunch of different ways
    3. Here’s some data on raises
    4. Histograms show frequencies of groups of numbers
    5. Gaps between bars in a histogram mean gaps among the data points
    6. Install and run R
    7. Load data into R
    8. R creates beautiful histograms
    9. Make histograms from subsets of your data
    10. Negotiation pays
    11. What will negotiation mean for you?
  17. 10. Regression: Prediction
    1. What are you going to do with all this money?
    2. An analysis that tells people what to ask for could be huge
    3. Behold... the Raise Reckoner!
    4. Inside the algorithm will be a method to predict raises
    5. Scatterplots compare two variables
    6. A line could tell your clients where to aim
    7. Predict values in each strip with the graph of averages
    8. The regression line predicts what raises people will receive
    9. The line is useful if your data shows a linear correlation
    10. You need an equation to make your predictions precise
      1. a represents the y-axis intercept
      2. b represents the slope
    11. Tell R to create a regression object
    12. The regression equation goes hand in hand with your scatterplot
    13. The regression equation is the Raise Reckoner algorithm
    14. Your raise predictor didn’t work out as planned...
  18. 11. Error: Err Well
    1. Your clients are pretty ticked off
    2. What did your raise prediction algorithm do?
    3. The segments of customers
    4. The guy who asked for 25% went outside the model
    5. How to handle the client who wants a prediction outside the data range
    6. The guy who got fired because of extrapolation has cooled off
    7. You’ve only solved part of the problem
    8. What does the data for the screwy outcomes look like?
    9. Chance errors are deviations from what your model predicts
    10. Error is good for you and your client
    11. Specify error quantitatively
    12. Quantify your residual distribution with Root Mean Squared error
    13. Your model in R already knows the R.M.S. error
    14. R’s summary of your linear model shows your R.M.S. error
    15. Segmentation is all about managing error
    16. Good regressions balance explanation and prediction
    17. Your segmented models manage error better than the original model
    18. Your clients are returning in droves
  19. 12. Relational Databases: Can you relate?
    1. The Dataville Dispatch wants to analyze sales
    2. Here’s the data they keep to track their operations
    3. You need to know how the data tables relate to each other
    4. A database is a collection of data with well-specified relations to each other
    5. Trace a path through the relations to make the comparison you need
    6. Create a spreadsheet that goes across that path
    7. Your summary ties article count and sales together
    8. Looks like your scatterplot is going over really well
    9. Copying and pasting all that data was a pain
    10. Relational databases manage relations for you
    11. Dataville Dispatch built an RDBMS with your relationship diagram
    12. Dataville Dispatch extracted your data using the SQL language
    13. Comparison possibilities are endless if your data is in a RDBMS
    14. You’re on the cover
  20. 13. Cleaning Data: Impose order
    1. Just got a client list from a defunct competitor
    2. The dirty secret of data analysis
    3. Head First Head Hunters wants the list for their sales team
    4. Cleaning messy data is all about preparation
    5. Once you’re organized, you can fix the data itself
    6. Use the # sign as a delimiter
    7. Excel split your data into columns using the delimiter
    8. Use SUBSTITUTE to replace the carat character
    9. You cleaned up all the first names
    10. The last name pattern is too complex for SUBSTITUTE
    11. Handle complex patterns with nested text formulas
    12. R can use regular expressions to crunch complex data patterns
    13. The sub command fixed your last names
    14. Now you can ship the data to your client
    15. Maybe you’re not quite done yet...
    16. Sort your data to show duplicate values together
    17. The data is probably from a relational database
    18. Remove duplicate names
    19. You created nice, clean, unique records
    20. Head First Head Hunters is recruiting like gangbusters!
    21. Leaving town...
    22. It’s been great having you here in Dataville!
  21. A. Leftovers: The Top Ten Things (we didn’t cover)
    1. #1: Everything else in statistics
    2. #2: Excel skills
    3. #3: Edward Tufte and his principles of visualization
    4. #4: PivotTables
    5. #5: The R community
    6. #6: Nonlinear and multiple regression
    7. #7: Null-alternative hypothesis testing
    8. #8: Randomness
    9. #9: Google Docs
    10. #10: Your expertise
  22. B. Install R: Start R up!
    1. Get started with R
  23. C. Install Excel Analysis Tools: The ToolPak
    1. Install the data analysis tools in Excel
  24. Index
  25. About the Author
  26. Copyright