Everyone has been predicted - by companies, governments, law-enforcement, hospitals and universities. Their computers say, "I knew you were going to do that!" Why? For good reason: Predicting human behavior combats financial risk, fortifies healthcare, reduces spam, toughens crime-fighting and boosts sales. Predictive analytics is the science that unleashes the power of this data.
In his rich, entertaining primer, former Columbia University professor and Predictive Analytics World founder Eric Siegel reveals the power and perils of prediction in his new book, "Predictive Analytics: The Power to Predict Who Will Click, Buy, Lie, or Die" (WILEY; February 2013; Hardcover & eBook; $28.00).
"Compelled to grow and propelled to the mainstream, predictive technology is commonplace and affects everyone, every day. It impacts your experiences in undetectable ways as you drive, shop, study, vote, see the doctor, communicate, watch TV, earn, borrow, or even steal," says Siegel. "This book is about the most influential and valuable achievements of computerized prediction, and the two things that make it possible: the people behind it, and the fascinating science that powers it. "
With this technology, computers literally learn from data how to predict the future behavior of individuals. In business, this ability to predict - which is based on patterns found in data - helps businesses make informed decisions and identify risks and opportunities. "Predictive Analytics" gives the reader a core understanding of how this technology works.
While perfect prediction is not possible, even lousy predictions can be extremely valuable. In this book, Siegel reveals the risks and rewards of prediction with intriguing examples such as:
- What unique form of mortgage risk Chase Bank predicted before the recession
- Predicting which people will drop out of school, cancel a subscription, or get divorced before they are even aware of it themselves
- Why early retirement decreases life expectancy and vegetarians miss fewer flights
- Five reasons organizations predict death, including one health insurance company
- How companies ascertain untold, private truths - how Target figures out you're pregnant and Hewlett-Packard deduces you're about to quit your job
- How judges and parole boards rely on crime-predicting computers to decide who stays in prison and who goes free
- What's predicted by the BBC, Citibank, ConEd, Facebook, Ford, Google, IBM, the IRS, Match.com, MTV, Netflix, Pandora, PayPal, Pfizer, and Wikipedia
- The "Anxiety Index" of blogs
- A compendium of 147 examples of how predictive analytics is applied in various aspects of life and business
"Data embodies a priceless collection of experience from which to learn. Every medical procedure, credit application, Facebook post, movie recommendations, spammy e-mail and purchase of any kind - each positive or negative outcome, each successful or failed event or transaction - is encoded as data and warehoused," adds Siegel. "As data piles up, we have ourselves a genuine gold rush. But data isn't the gold - data in its raw form is boring crud. The gold is what's discovered therein. With the new knowledge gained, prediction is possible."