Statistical Application
By Clint Hagen
Statistics Senior Seminar 2006
Outline
What Neural Networks are and why they
are desirable
How the process works and appropriate
statistical applications
Basic Architectures and algorithms
Applications
Drawbacks and limitations
Demonstration using “NeuroShell 2”
The original analyst
What are they?
Computer algorithms designed to mimic
human brain function
Set of simple computational units which
are highly interconnected
Human Brain Function
Neural Network Function
Some Similarities
Why Neural Networks are desirable
Human brain can generalize from abstract
Recognize patterns in the presence of
noise
Recall memories
Make decisions for current problems
based on prior experience
Why Desirable in Statistics
Prediction of future events based on past
experience
Able to classify to nearest pattern in
memory, doesn’t have to be exact
Predict latent variables that are not easily
measured
Non-linear regression problems
What are Neural Networks?
One-way only
Can have multiple
hidden layers
Each layer can have Hidden Hidden Hidden Hidden
Layer Layer Layer Layer
independent number
of neurons
Each layer fully
connected to the next
layer. Output Output Output Output
Feed-Forward Design
Alternate Structure
Predictor 1 Predictor 2 Predictor 3
Neuron i Neuron j
Wik
Wjl
Neuron k Neuron l
Output t
Weights
Each connection (arrow) in the previous
diagram has a weight, also called the
synaptic weight
The function of these weights is to reduce
error between desired output and actual
output
Weights
Weights are adjustable
Weight Wij is interpreted as the strength of
the connection between the jth unit and the
ith unit
Weights are computed in opposite
direction as the networks runs
Netinput ij = ∑ wij * outputj + µi