Variable selection for financial distress classification using a genetic algorithm

This paper is concerned with the use of a genetic algorithm to select financial ratios for corporate distress classification models. For this purpose, the fitness value associated to a set of ratios is made to reflect the requirements of maximizing the amount of information available for the model and minimizing the collinearity between the model inputs. A case study involving 60 failed and continuing British firms in the period 1997-2000 is used for illustration. The classification model based on ratios selected by the genetic algorithm compares favorably with a model employing ratios usually found in the financial distress literature.

On combination of SMOTE and particle swarm optimization based radial basis function classifier for imbalanced problems

The combination of the synthetic minority oversampling technique (SMOTE) and the radial basis function (RBF) classifier is proposed to deal with classification for imbalanced two-class data. In order to enhance the significance of the small and specific region belonging to the positive class in the decision region, the SMOTE is applied to generate synthetic instances for the positive class to balance the training data set. Based on the over-sampled training data, the RBF classifier is constructed by applying the orthogonal forward selection procedure, in which the classifier structure and the parameters of RBF kernels are determined using a particle swarm optimization algorithm based on the criterion of minimizing the leave-one-out misclassification rate. The experimental results on both simulated and real imbalanced data sets are presented to demonstrate the effectiveness of our proposed algorithm.

A combined SMOTE and PSO based RBF classifier for two-class imbalanced problems

This contribution proposes a powerful technique for two-class imbalanced classification problems by combining the synthetic minority over-sampling technique (SMOTE) and the particle swarm optimisation (PSO) aided radial basis function (RBF) classifier. In order to enhance the significance of the small and specific region belonging to the positive class in the decision region, the SMOTE is applied to generate synthetic instances for the positive class to balance the training data set. Based on the over-sampled training data, the RBF classifier is constructed by applying the orthogonal forward selection procedure, in which the classifier's structure and the parameters of RBF kernels are determined using a PSO algorithm based on the criterion of minimising the leave-one-out misclassification rate. The experimental results obtained on a simulated imbalanced data set and three real imbalanced data sets are presented to demonstrate the effectiveness of our proposed algorithm.

An overview of domestic energy models and a new approach with agent based modelling

Government targets for CO2 reductions are being progressively tightened, the Climate Change Act set the UK target as an 80% reduction by 2050 on 1990 figures. The residential sector accounts for about 30% of emissions. This paper discusses current modelling techniques in the residential sector: principally top-down and bottom-up. Top-down models work on a macro-economic basis and can be used to consider large scale economic changes; bottom-up models are detail rich to model technological changes. Bottom-up models demonstrate what is technically possible. However, there are differences between the technical potential and what is likely given the limited economic rationality of the typical householder. This paper recommends research to better understand individuals’ behaviour. Such research needs to include actual choices, stated preferences and opinion research to allow a detailed understanding of the individual end user. This increased understanding can then be used in an agent based model (ABM). In an ABM, agents are used to model real world actors and can be given a rule set intended to emulate the actions and behaviours of real people. This can help in understanding how new technologies diffuse. In this way a degree of micro-economic realism can be added to domestic carbon modelling. Such a model should then be of use for both forward projections of CO2 and to analyse the cost effectiveness of various policy measures.

Parkinson’s Disease tremor classification – a comparison between Support Vector Machines and neural networks

Deep Brain Stimulation has been used in the study of and for treating Parkinson’s Disease (PD) tremor symptoms since the 1980s. In the research reported here we have carried out a comparative analysis to classify tremor onset based on intraoperative microelectrode recordings of a PD patient’s brain Local Field Potential (LFP) signals. In particular, we compared the performance of a Support Vector Machine (SVM) with two well known artificial neural network classifiers, namely a Multiple Layer Perceptron (MLP) and a Radial Basis Function Network (RBN). The results show that in this study, using specifically PD data, the SVM provided an overall better classification rate achieving an accuracy of 81% recognition.

Parallel rule induction with information theoretic pre-pruning

In a world where data is captured on a large scale the major challenge for data mining algorithms is to be able to scale up to large datasets. There are two main approaches to inducing classification rules, one is the divide and conquer approach, also known as the top down induction of decision trees; the other approach is called the separate and conquer approach. A considerable amount of work has been done on scaling up the divide and conquer approach. However, very little work has been conducted on scaling up the separate and conquer approach.In this work we describe a parallel framework that allows the parallelisation of a certain family of separate and conquer algorithms, the Prism family. Parallelisation helps the Prism family of algorithms to harvest additional computer resources in a network of computers in order to make the induction of classification rules scale better on large datasets. Our framework also incorporates a pre-pruning facility for parallel Prism algorithms.

Induction of modular classification rules: using Jmax-pruning

The Prism family of algorithms induces modular classification rules which, in contrast to decision tree induction algorithms, do not necessarily fit together into a decision tree structure. Classifiers induced by Prism algorithms achieve a comparable accuracy compared with decision trees and in some cases even outperform decision trees. Both kinds of algorithms tend to overfit on large and noisy datasets and this has led to the development of pruning methods. Pruning methods use various metrics to truncate decision trees or to eliminate whole rules or single rule terms from a Prism rule set. For decision trees many pre-pruning and postpruning methods exist, however for Prism algorithms only one pre-pruning method has been developed, J-pruning. Recent work with Prism algorithms examined J-pruning in the context of very large datasets and found that the current method does not use its full potential. This paper revisits the J-pruning method for the Prism family of algorithms and develops a new pruning method Jmax-pruning, discusses it in theoretical terms and evaluates it empirically.

Parallel random prism: a computationally efficient ensemble learner for classification

Generally classifiers tend to overfit if there is noise in the training data or there are missing values. Ensemble learning methods are often used to improve a classifier's classification accuracy. Most ensemble learning approaches aim to improve the classification accuracy of decision trees. However, alternative classifiers to decision trees exist. The recently developed Random Prism ensemble learner for classification aims to improve an alternative classification rule induction approach, the Prism family of algorithms, which addresses some of the limitations of decision trees. However, Random Prism suffers like any ensemble learner from a high computational overhead due to replication of the data and the induction of multiple base classifiers. Hence even modest sized datasets may impose a computational challenge to ensemble learners such as Random Prism. Parallelism is often used to scale up algorithms to deal with large datasets. This paper investigates parallelisation for Random Prism, implements a prototype and evaluates it empirically using a Hadoop computing cluster.

Elastic-net prefiltering for two-class classification

A two-stage linear-in-the-parameter model construction algorithm is proposed aimed at noisy two-class classification problems. The purpose of the first stage is to produce a prefiltered signal that is used as the desired output for the second stage which constructs a sparse linear-in-the-parameter classifier. The prefiltering stage is a two-level process aimed at maximizing a model's generalization capability, in which a new elastic-net model identification algorithm using singular value decomposition is employed at the lower level, and then, two regularization parameters are optimized using a particle-swarm-optimization algorithm at the upper level by minimizing the leave-one-out (LOO) misclassification rate. It is shown that the LOO misclassification rate based on the resultant prefiltered signal can be analytically computed without splitting the data set, and the associated computational cost is minimal due to orthogonality. The second stage of sparse classifier construction is based on orthogonal forward regression with the D-optimality algorithm. Extensive simulations of this approach for noisy data sets illustrate the competitiveness of this approach to classification of noisy data problems.

An effective approach for land-cover classification from airborne lidar fused with co-registered data

Airborne lidar provides accurate height information of objects on the earth and has been recognized as a reliable and accurate surveying tool in many applications. In particular, lidar data offer vital and significant features for urban land-cover classification, which is an important task in urban land-use studies. In this article, we present an effective approach in which lidar data fused with its co-registered images (i.e. aerial colour images containing red, green and blue (RGB) bands and near-infrared (NIR) images) and other derived features are used effectively for accurate urban land-cover classification. The proposed approach begins with an initial classification performed by the Dempster–Shafer theory of evidence with a specifically designed basic probability assignment function. It outputs two results, i.e. the initial classification and pseudo-training samples, which are selected automatically according to the combined probability masses. Second, a support vector machine (SVM)-based probability estimator is adopted to compute the class conditional probability (CCP) for each pixel from the pseudo-training samples. Finally, a Markov random field (MRF) model is established to combine spatial contextual information into the classification. In this stage, the initial classification result and the CCP are exploited. An efficient belief propagation (EBP) algorithm is developed to search for the global minimum-energy solution for the maximum a posteriori (MAP)-MRF framework in which three techniques are developed to speed up the standard belief propagation (BP) algorithm. Lidar and its co-registered data acquired by Toposys Falcon II are used in performance tests. The experimental results prove that fusing the height data and optical images is particularly suited for urban land-cover classification. There is no training sample needed in the proposed approach, and the computational cost is relatively low. An average classification accuracy of 93.63% is achieved.

A unified neurofuzzy model for classification

This work proposes a unified neurofuzzy modelling scheme. To begin with, the initial fuzzy base construction method is based on fuzzy clustering utilising a Gaussian mixture model (GMM) combined with the analysis of covariance (ANOVA) decomposition in order to obtain more compact univariate and bivariate membership functions over the subspaces of the input features. The mean and covariance of the Gaussian membership functions are found by the expectation maximisation (EM) algorithm with the merit of revealing the underlying density distribution of system inputs. The resultant set of membership functions forms the basis of the generalised fuzzy model (GFM) inference engine. The model structure and parameters of this neurofuzzy model are identified via the supervised subspace orthogonal least square (OLS) learning. Finally, instead of providing deterministic class label as model output by convention, a logistic regression model is applied to present the classifier’s output, in which the sigmoid type of logistic transfer function scales the outputs of the neurofuzzy model to the class probability. Experimental validation results are presented to demonstrate the effectiveness of the proposed neurofuzzy modelling scheme.

Classification and fault detection methods for fuel cell monitoring and quality control

In this paper, various types of fault detection methods for fuel cells are compared. For example, those that use a model based approach or a data driven approach or a combination of the two. The potential advantages and drawbacks of each method are discussed and comparisons between methods are made. In particular, classification algorithms are investigated, which separate a data set into classes or clusters based on some prior knowledge or measure of similarity. In particular, the application of classification methods to vectors of reconstructed currents by magnetic tomography or to vectors of magnetic field measurements directly is explored. Bases are simulated using the finite integration technique (FIT) and regularization techniques are employed to overcome ill-posedness. Fisher's linear discriminant is used to illustrate these concepts. Numerical experiments show that the ill-posedness of the magnetic tomography problem is a part of the classification problem on magnetic field measurements as well. This is independent of the particular working mode of the cell but influenced by the type of faulty behavior that is studied. The numerical results demonstrate the ill-posedness by the exponential decay behavior of the singular values for three examples of fault classes.

How Twitter is studied in the medical professions: a classification of Twitter papers indexed in PubMed

Background: Since their inception, Twitter and related microblogging systems have provided a rich source of information for researchers and have attracted interest in their affordances and use. Since 2009 PubMed has included 123 journal articles on medicine and Twitter, but no overview exists as to how the field uses Twitter in research. // Objective: This paper aims to identify published work relating to Twitter indexed by PubMed, and then to classify it. This classification will provide a framework in which future researchers will be able to position their work, and to provide an understanding of the current reach of research using Twitter in medical disciplines. Limiting the study to papers indexed by PubMed ensures the work provides a reproducible benchmark. // Methods: Papers, indexed by PubMed, on Twitter and related topics were identified and reviewed. The papers were then qualitatively classified based on the paper’s title and abstract to determine their focus. The work that was Twitter focused was studied in detail to determine what data, if any, it was based on, and from this a categorization of the data set size used in the studies was developed. Using open coded content analysis additional important categories were also identified, relating to the primary methodology, domain and aspect. // Results: As of 2012, PubMed comprises more than 21 million citations from biomedical literature, and from these a corpus of 134 potentially Twitter related papers were identified, eleven of which were subsequently found not to be relevant. There were no papers prior to 2009 relating to microblogging, a term first used in 2006. Of the remaining 123 papers which mentioned Twitter, thirty were focussed on Twitter (the others referring to it tangentially). The early Twitter focussed papers introduced the topic and highlighted the potential, not carrying out any form of data analysis. The majority of published papers used analytic techniques to sort through thousands, if not millions, of individual tweets, often depending on automated tools to do so. Our analysis demonstrates that researchers are starting to use knowledge discovery methods and data mining techniques to understand vast quantities of tweets: the study of Twitter is becoming quantitative research. // Conclusions: This work is to the best of our knowledge the first overview study of medical related research based on Twitter and related microblogging. We have used five dimensions to categorise published medical related research on Twitter. This classification provides a framework within which researchers studying development and use of Twitter within medical related research, and those undertaking comparative studies of research relating to Twitter in the area of medicine and beyond, can position and ground their work.

Analysis of full-waveform LiDAR data for classification of an orange orchard scene

Full-waveform laser scanning data acquired with a Riegl LMS-Q560 instrument were used to classify an orange orchard into orange trees, grass and ground using waveform parameters alone. Gaussian decomposition was performed on this data capture from the National Airborne Field Experiment in November 2006 using a custom peak-detection procedure and a trust-region-reflective algorithm for fitting Gauss functions. Calibration was carried out using waveforms returned from a road surface, and the backscattering coefficient c was derived for every waveform peak. The processed data were then analysed according to the number of returns detected within each waveform and classified into three classes based on pulse width and c. For single-peak waveforms the scatterplot of c versus pulse width was used to distinguish between ground, grass and orange trees. In the case of multiple returns, the relationship between first (or first plus middle) and last return c values was used to separate ground from other targets. Refinement of this classification, and further sub-classification into grass and orange trees was performed using the c versus pulse width scatterplots of last returns. In all cases the separation was carried out using a decision tree with empirical relationships between the waveform parameters. Ground points were successfully separated from orange tree points. The most difficult class to separate and verify was grass, but those points in general corresponded well with the grass areas identified in the aerial photography. The overall accuracy reached 91%, using photography and relative elevation as ground truth. The overall accuracy for two classes, orange tree and combined class of grass and ground, yielded 95%. Finally, the backscattering coefficient c of single-peak waveforms was also used to derive reflectance values of the three classes. The reflectance of the orange tree class (0.31) and ground class (0.60) are consistent with published values at the wavelength of the Riegl scanner (1550 nm). The grass class reflectance (0.46) falls in between the other two classes as might be expected, as this class has a mixture of the contributions of both vegetation and ground reflectance properties.

Pollen-based differentiation of Amazonian rainforest communities and implications for lowland palaeoecology in tropical South America

An ongoing controversy in Amazonian palaeoecology is the manner in which Amazonian rainforest communities have responded to environmental change over the last glacial–interglacial cycle. Much of this controversy results from an inability to identify the floristic heterogeneity exhibited by rainforest communities within fossil pollen records. We apply multivariate (Principal Components Analysis) and classification (Unweighted Pair Group with Arithmetic Mean Agglomerative Classification) techniques to floral-biometric, modern pollen trap and lake sediment pollen data situated within different rainforest communities in the tropical lowlands of Amazonian Bolivia. Modern pollen rain analyses from artificial pollen traps show that evergreen terra firme (well-drained), evergreen terra firme liana, evergreen seasonally inundated, and evergreen riparian rainforests may be readily differentiated, floristically and palynologically. Analogue matching techniques, based on Euclidean distance measures, are employed to compare these pollen signatures with surface sediment pollen assemblages from five lakes: Laguna Bella Vista, Laguna Chaplin, and Laguna Huachi situated within the Madeira-Tapajós moist forest ecoregion, and Laguna Isirere and Laguna Loma Suarez, which are situated within forest patches in the Beni savanna ecoregion. The same numerical techniques are used to compare rainforest pollen trap signatures with the fossil pollen record of Laguna Chaplin.