How To Interpret Model Performance with Cost Functions

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Watch the video series: https://salford-systems.wistia.com/medias/khutf815bh
A question we hear time and again is "how does your data mining software determine the best model?" In order to shed some light on this, a well as provide an in-depth analysis for those who want to take it a step farther, we have created a detailed video analysis of how the 'best model' is chosen. The simple answer is: it depends.

What are cost functions?
Cost functions (a.k.a loss functions) are a way to help the data modeler solve a supervised learning problem, either classification or regression. The 'fit' of the response surface on the data available will associate a cost of the event that occurs. In an optimization example, you would want to minimize your cost.

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How To Interpret Model Performance with Cost Functions

  1. 1. With Cost Functions A question we hear time and again is "how does your data mining software determine the best model?" In order to shed some light on this, a well as provide an in-depth analysis for those who want to take it a step farther, we have created a detailed video analysis of how the 'best model' is chosen. The simple answer is: it depends. What is a cost function? Helps the A K A DATA ANALYST (YOU) Loss SOLVE A SUPERVISED LEARNING FUNCTION PROBLEM Used In classification Used in 9 Regression 8 7 6 5 4 3 2 1 2009 2010 2011 2012 COST FUNCTIONS ARE ASSOCIATED WITH MODEL PERFORMANCE IN OPTIMIZATION EXAMPLES YOU WANT TO MINIMIZE YOUR COST KEY TAKEAWAYS: 1. Cost functions are important because there are many ways to design a machine learning algorithm, as well as interpret its performance. 2. Understanding cost functions will help you, the analyst, discover the underpinnings of the algorithms and usefulness of each algorithm’s functionality. 9 COST FUNCTIONS ARE EXPLAINED VIA VIDEO

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