Friday, June 15, 2007

What Data Mining Can and Can't Do

I include this article because Peter Fader is an expert in behavior predictive modeling. The caveat is that there is a difference between predicting behavior and predicting patterns that are not necessary related to behavior. For example, in molecular genetics we try to predict how a gene or a chemical substance have an impact on the physiology of a person. These reactions are mostly physical instead of behavior oriented. Nevertheless, I agree with Peter that executives expectations of data mining are out of proportion to the investment in predictive modeling. Predicting modeling using Excel spreadsheets might work on behavioral analysis, but I do not think it will work in the health care and biotechnology industries. When I was practicing law I used to refer to this as the "what is at stake syndrome". In a civil case is money, but in a criminal case is a person's freedom. Experience have taught me that generalizations make a great sound bite, but could be dangerous in the real world.

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