Data analysis

Analysis of data is a process of inspecting, cleansing, transforming, and modeli

ng data with the goal of discovering useful information, suggesting conclusions,
and supporting decision-making. Data analysis has multiple facets and approache
s, encompassing diverse techniques under a variety of names, in different busine
ss, 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. Bus
iness intelligence covers data analysis that relies heavily on aggregation, focu
sing on business information. In statistical applications, some people divide da
ta analysis into descriptive statistics, exploratory data analysis (EDA), and co
nfirmatory data analysis (CDA). EDA focuses on discovering new features in the d
ata and CDA on confirming or falsifying existing hypotheses. Predictive analytic
s focuses on application of statistical models for predictive forecasting or cla
ssification, while text analytics applies statistical, linguistic, and structura
l 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 l
inked to data visualization and data dissemination. The term data analysis is so
metimes used as a synonym for data modeling.
The process of data analysis[edit]
Data science process flowchart
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 ana
lyzed to answer questions, test hypotheses or disprove theories.[1]
Statistician John Tukey defined data analysis in 1961 as: "Procedures for analyz
ing data, techniques for interpreting the results of such procedures, ways of pl
anning the gathering of data to make its analysis easier, more precise or more a
ccurate, and all the machinery and results of (mathematical) statistics which ap
ply 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[edit]
The data necessary as inputs to the analysis are specified based upon the requir
ements of those directing the analysis or customers who will use the finished pr
oduct of the analysis. The general type of entity upon which the data will be co
llected 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 labe
l for numbers).[3]
Data collection[edit]
Data is collected from a variety of sources. The requirements may be communicate
d by analysts to custodians of the data, such as information technology personne
l within an organization. The data may also be collected from sensors in the env
ironment, such as traffic cameras, satellites, recording devices, etc. It may al
so be obtained through interviews, downloads from online sources, or reading doc
umentation.[3]
Data processing[edit]
The phases of the intelligence cycle used to convert raw information into action

able intelligence or knowledge are conceptually similar to the phases in data an

alysis.
Data initially obtained must be processed or organized for analysis. For instanc
e, these may involve placing data into rows and columns in a table format (i.e.,
structured data) for further analysis, such as within a spreadsheet or statisti
cal software.[3]
Data cleaning[edit]
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, identifying inacc
uracy of data, overall quality of existing data,[4] deduplication, and column se
gmentation.[5] Such data problems can also be identified through a variety of an
alytical techniques. For example, with financial information, the totals for par
ticular variables may be compared against separately published numbers believed
to be reliable.[6] Unusual amounts above or below pre-determined thresholds may
also be reviewed. There are several types of data cleaning that depend on the ty
pe of data such as phone numbers, email addresses, employers etc. Quantitative d
ata methods for outlier detection can be used to get rid of likely incorrectly e
ntered data. Textual data spellcheckers can be used to lessen the amount of mist
yped words, but it is harder to tell if the words themselves are correct.[7]
Exploratory data analysis[edit]
Once the data is cleaned, it can be analyzed. Analysts may apply a variety of te
chniques referred to as exploratory data analysis to begin understanding the mes
sages contained in the data.[8][9] The process of exploration may result in addi
tional data cleaning or additional requests for data, so these activities may be
iterative in nature. Descriptive statistics such as the average or median may b
e generated to help understand the data. Data visualization may also be used to
examine the data in graphical format, to obtain additional insight regarding the
messages within the data.[3]
Modeling and algorithms[edit]
Mathematical formulas or models called algorithms may be applied to the data to
identify relationships among the variables, such as correlation or causation. In
general terms, models may be developed to evaluate a particular variable in the
data based on other variable(s) in the data, with some residual error depending
on model accuracy (i.e., Data = Model + Error).[1]
Inferential statistics includes techniques to measure relationships between part
icular 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 (ad
vertising). It may be described as Y = aX + b + error, where the model is design
ed such that a and b minimize the error when the model predicts Y for a given ra
nge 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[edit]
A data product is a computer application that takes data inputs and generates ou
tputs, feeding them back into the environment. It may be based on a model or alg
orithm. An example is an application that analyzes data about customer purchasin
g history and recommends other purchases the customer might enjoy.[3]
Communication[edit]
Data visualization to understand the results of a data analysis.[10]
Main article: Data visualization
Once the data is analyzed, it may be reported in many formats to the users of th

e analysis to support their requirements. The users may have feedback, which res
ults 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 v
isualization 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 helpf
ul to a user who might lookup specific numbers, while charts (e.g., bar charts o
r line charts) may help explain the quantitative messages contained in the data.
Quantitative messages[edit]
Main article: Data visualization
A time series illustrated with a line chart demonstrating trends in U.S. federal
spending and revenue over time.
A scatterplot illustrating correlation between two variables (inflation and unem
ployment) measured at points in time.
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 grap
hs used to help communicate the message. Customers specifying requirements and a
nalysts performing the data analysis may consider these messages during the cour
se of the process.
Time-series: A single variable is captured over a period of time, such as the un
employment rate over a 10-year period. A line chart may be used to demonstrate t
he trend.
Ranking: Categorical subdivisions are ranked in ascending or descending order, s
uch as a ranking of sales performance (the measure) by sales persons (the catego
ry, 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.
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.
Deviation: Categorical subdivisions are compared against a reference, such as a
comparison of actual vs. budget expenses for several departments of a business f
or a given time period. A bar chart can show comparison of the actual versus the
reference amount.
Frequency distribution: Shows the number of observations of a particular variabl
e for given interval, such as the number of years in which the stock market retu
rn is between intervals such as 0-10%, 11-20%, etc. A histogram, a type of bar c
hart, may be used for this analysis.
Correlation: Comparison between observations represented by two variables (X,Y)
to determine if they tend to move in the same or opposite directions. For exampl
e, plotting unemployment (X) and inflation (Y) for a sample of months. A scatter
plot is typically used for this message.
Nominal comparison: Comparing categorical subdivisions in no particular order, s
uch as the sales volume by product code. A bar chart may be used for this compar
ison.
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.[11][12]