From the course: Introduction to Business Analytics (2020)
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Data driven versus data informed
From the course: Introduction to Business Analytics (2020)
Data driven versus data informed
- In predictive modeling, there's a concept called overfitting where an analysis corresponds too closely to a particular set of data and may therefore fail to fit any additional data or predict future observations reliably. This same concept can be applied to making decisions based on data. It is important to balance your intuition and data when making your decision. Now this concept of balancing intuition and data is often referred to as being data-informed, which means that you're much less vulnerable to data quality issues. These data quality issues can manifest in errors in the dataset, but they can also show up as outside factors that are not included in the analysis. So the opposite of data-informed decision making is called data-driven decision making. This is when data is really the only factor taken into consideration. There's some cases where this is unavoidable such as a startup going into a completely new…
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