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Item Knowledge Discovery for Higher Education Student Retention Based on Data Mining: Machine Learning Algorithms and Case Study in ChileAutores: Palacios, Carlos A.; Reyes Suarez, José A.; Bearzotti, Lorena A.; Leiva, Victor; Marchant, CarolinaData mining is employed to extract useful information and to detect patterns from often large data sets, closely related to knowledge discovery in databases and data science. In this investigation, we formulate models based on machine learning algorithms to extract relevant information predicting student retention at various levels, using higher education data and specifying the relevant variables involved in the modeling. Then, we utilize this information to help the process of knowledge discovery. We predict student retention at each of three levels during their first, second, and third years of study, obtaining models with an accuracy that exceeds 80% in all scenarios. These models allow us to adequately predict the level when dropout occurs. Among the machine learning algorithms used in this work are: decision trees, k-nearest neighbors, logistic regression, naive Bayes, random forest, and support vector machines, of which the random forest technique performs the best. We detect that secondary educational score and the community poverty index are important predictive variables, which have not been previously reported in educational studies of this type. The dropout assessment at various levels reported here is valid for higher education institutions around the world with similar conditions to the Chilean case, where dropout rates affect the efficiency of such institutions. Having the ability to predict dropout based on student's data enables these institutions to take preventative measures, avoiding the dropouts. In the case study, balancing the majority and minority classes improves the performance of the algorithms.Item Development and application of consumer credit scoring models using profit-based V classification measuresAutores: Verbraken, T.; Bravo, C.; Weber, R.; Baesens, B.This paper presents a new approach for consumer credit scoring, by tailoring a profit-based classification performance measure to credit risk modeling. This performance measure takes into account the expected profits and losses of credit granting and thereby better aligns the model developers' objectives with those of the lending company. It is based on the Expected Maximum Profit (EMP) measure and is used to find a trade-off between the expected losses - driven by the exposure of the loan and the loss given default and the operational income given by the loan. Additionally, one of the major advantages of using the proposed measure is that it permits to calculate the optimal cutoff value, which is necessary for model implementation. To test the proposed approach, we use a dataset of loans granted by a government institution, and benchmarked the accuracy and monetary gain of using EMP, accuracy, and the area under the ROC curve as measures for selecting model parameters, and for determining the respective cutoff values. The results show that our proposed profit-based classification measure outperforms the alternative approaches in terms of both accuracy and monetary value in the test set, and that it facilitates model deployment. (C) 2014 Elsevier B.V. All rights reserved.
