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Data Mining Essay

4642 words - 19 pages

Data Mining

With the increased and widespread use of technologies, interest in data mining has increased rapidly. Companies are now utilized data mining techniques to exam their database looking for trends, relationships, and outcomes to enhance their overall operations and discover new patterns that may allow them to better serve their customers. Data mining provides numerous benefits to businesses, government, society as well as individual persons. However, like many technologies, there are negative things that caused by data mining such as invasion of privacy right. This paper tries to explore the advantages as well as the disadvantages of data mining. In addition, the ethical and global issues regarding the use of data mining will also be discussed. Finally, an ethical analysis about data mining is provided.

WHAT IS DATA MINING?

For many years, statistics have been used to analyze data in an effort to find correlations, patterns, and dependencies. However, with an increased in technology more and more data are available, which greatly exceed the human capacity to manually analyze them. Before the 1990?s, data collected by bankers, credit card companies, department stores and so on have little used. But in recent years, as computational power increases, the idea of data mining has emerged. Data mining is a term used to describe the ?process of discovering patterns and trends in large data sets in order to find useful decision-making information.?1 With data mining, the information obtained from the bankers, credit card companies, and department stores can be put to good use.

HOW DATA MINING WORKS

Data mining is a component of a wider process called ?knowledge discovery from database?2. It involves scientists and statisticians, as well as those working in other fields such as machine learning, artificial intelligence, information retrieval and pattern recognition.

Before a data set can be mined, it first has to be ?cleaned?. This cleaning process removes errors, ensures consistency and takes missing values into account. Next, computer algorithms are used to ?mine? the clean data looking for unusual patterns. Finally, the patterns are interpreted to produce new knowledge.3

How data mining can assist bankers in enhancing their businesses is illustrated in this example. Records include information such as age, sex, marital status, occupation, number of children, and etc. of the bank?s customers over the years are used in the mining process. First, an algorithm is used to identify characteristics that distinguish customers who took out a particular kind of loan from those who did not. Eventually, it develops ?rules? by which it can identify customers who are likely to be good candidates for such a loan. These rules are then used to identify such customers on the remainder of the database. Next, another algorithm is used to sort the database into cluster or groups of people with many similar...

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