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diff --git a/content/blog/2020-07-26-business-analysis.org b/content/blog/2020-07-26-business-analysis.org new file mode 100644 index 0000000..52aef99 --- /dev/null +++ b/content/blog/2020-07-26-business-analysis.org @@ -0,0 +1,366 @@ +#+date: <2020-07-26> +#+title: Algorithmically Analyzing Local Businesses +#+description: + + +* Background Information + +This project aims to help investors learn more about a random city in +order to determine optimal locations for business investments. The data +used in this project was obtained using Foursquare's developer API. + +Fields include: + +- Venue Name +- Venue Category +- Venue Latitude +- Venue Longitude + +There are 232 records found using the center of Lincoln as the area of +interest with a radius of 10,000. + +* Import the Data + +The first step is the simplest: import the applicable libraries. We will +be using the libraries below for this project. + +#+begin_src python +# Import the Python libraries we will be using +import pandas as pd +import requests +import folium +import math +import json +from pandas.io.json import json_normalize +from sklearn.cluster import KMeans +#+end_src + +To begin our analysis, we need to import the data for this project. The +data we are using in this project comes directly from the Foursquare +API. The first step is to get the latitude and longitude of the city +being studied (Lincoln, NE) and setting up the folium map. + +#+begin_src python +# Define the latitude and longitude, then map the results +latitude = 40.806862 +longitude = -96.681679 +map_LNK = folium.Map(location=[latitude, longitude], zoom_start=12) + +map_LNK +#+end_src + +Now that we have defined our city and created the map, we need to go get +the business data. The Foursquare API will limit the results to 100 per +API call, so we use our first API call below to determine the total +results that Foursquare has found. Since the total results are 232, we +perform the API fetching process three times (100 + 100 + 32 = 232). + +#+begin_src python +# Foursquare API credentials +CLIENT_ID = 'your-client-id' +CLIENT_SECRET = 'your-client-secret' +VERSION = '20180604' + +# Set up the URL to fetch the first 100 results +LIMIT = 100 +radius = 10000 +url = 'https://api.foursquare.com/v2/venues/explore?&client_id={}&client_secret={}&v={}&ll={},{}&radius={}&limit={}'.format( + CLIENT_ID, + CLIENT_SECRET, + VERSION, + latitude, + longitude, + radius, + LIMIT) + +# Fetch the first 100 results +results = requests.get(url).json() + +# Determine the total number of results needed to fetch +totalResults = results['response']['totalResults'] +totalResults + +# Set up the URL to fetch the second 100 results (101-200) +LIMIT = 100 +offset = 100 +radius = 10000 +url2 = 'https://api.foursquare.com/v2/venues/explore?&client_id={}&client_secret={}&v={}&ll={},{}&radius={}&limit={}&offset={}'.format( + CLIENT_ID, + CLIENT_SECRET, + VERSION, + latitude, + longitude, + radius, + LIMIT, + offset) + +# Fetch the second 100 results (101-200) +results2 = requests.get(url2).json() + +# Set up the URL to fetch the final results (201 - 232) +LIMIT = 100 +offset = 200 +radius = 10000 +url3 = 'https://api.foursquare.com/v2/venues/explore?&client_id={}&client_secret={}&v={}&ll={},{}&radius={}&limit={}&offset={}'.format( + CLIENT_ID, + CLIENT_SECRET, + VERSION, + latitude, + longitude, + radius, + LIMIT, + offset) + +# Fetch the final results (201 - 232) +results3 = requests.get(url3).json() +#+end_src + +* Clean the Data + +Now that we have our data in three separate dataframes, we need to +combine them into a single dataframe and make sure to reset the index so +that we have a unique ID for each business. The =get~categorytype~= +function below will pull the categories and name from each business's +entry in the Foursquare data automatically. Once all the data has been +labeled and combined, the results are stored in the =nearby_venues= +dataframe. + +#+begin_src python +# This function will extract the category of the venue from the API dictionary +def get_category_type(row): + try: + categories_list = row['categories'] + except: + categories_list = row['venue.categories'] + + if len(categories_list) == 0: + return None + else: + return categories_list[0]['name'] + +# Get the first 100 venues +venues = results['response']['groups'][0]['items'] +nearby_venues = json_normalize(venues) + +# filter columns +filtered_columns = ['venue.name', 'venue.categories', 'venue.location.lat', 'venue.location.lng'] +nearby_venues = nearby_venues.loc[:, filtered_columns] + +# filter the category for each row +nearby_venues['venue.categories'] = nearby_venues.apply(get_category_type, axis=1) + +# clean columns +nearby_venues.columns = [col.split(".")[-1] for col in nearby_venues.columns] + +--- + +# Get the second 100 venues +venues2 = results2['response']['groups'][0]['items'] +nearby_venues2 = json_normalize(venues2) # flatten JSON + +# filter columns +filtered_columns2 = ['venue.name', 'venue.categories', 'venue.location.lat', 'venue.location.lng'] +nearby_venues2 = nearby_venues2.loc[:, filtered_columns] + +# filter the category for each row +nearby_venues2['venue.categories'] = nearby_venues2.apply(get_category_type, axis=1) + +# clean columns +nearby_venues2.columns = [col.split(".")[-1] for col in nearby_venues.columns] +nearby_venues = nearby_venues.append(nearby_venues2) + +--- + +# Get the rest of the venues +venues3 = results3['response']['groups'][0]['items'] +nearby_venues3 = json_normalize(venues3) # flatten JSON + +# filter columns +filtered_columns3 = ['venue.name', 'venue.categories', 'venue.location.lat', 'venue.location.lng'] +nearby_venues3 = nearby_venues3.loc[:, filtered_columns] + +# filter the category for each row +nearby_venues3['venue.categories'] = nearby_venues3.apply(get_category_type, axis=1) + +# clean columns +nearby_venues3.columns = [col.split(".")[-1] for col in nearby_venues3.columns] + +nearby_venues = nearby_venues.append(nearby_venues3) +nearby_venues = nearby_venues.reset_index(drop=True) +nearby_venues +#+end_src + +* Visualize the Data + +We now have a complete, clean data set. The next step is to visualize +this data onto the map we created earlier. We will be using folium's +=CircleMarker()= function to do this. + +#+begin_src python +# add markers to map +for lat, lng, name, categories in zip(nearby_venues['lat'], nearby_venues['lng'], nearby_venues['name'], nearby_venues['categories']): + label = '{} ({})'.format(name, categories) + label = folium.Popup(label, parse_html=True) + folium.CircleMarker( + [lat, lng], + radius=5, + popup=label, + color='blue', + fill=True, + fill_color='#3186cc', + fill_opacity=0.7, + ).add_to(map_LNK) + +map_LNK +#+end_src + +* Clustering: /k-means/ + +To cluster the data, we will be using the /k-means/ algorithm. This +algorithm is iterative and will automatically make sure that data points +in each cluster are as close as possible to each other, while being as +far as possible away from other clusters. + +However, we first have to figure out how many clusters to use (defined +as the variable /'k'/). To do so, we will use the next two functions to +calculate the sum of squares within clusters and then return the optimal +number of clusters. + +#+begin_src python +# This function will return the sum of squares found in the data +def calculate_wcss(data): + wcss = [] + for n in range(2, 21): + kmeans = KMeans(n_clusters=n) + kmeans.fit(X=data) + wcss.append(kmeans.inertia_) + + return wcss + +# Drop 'str' cols so we can use k-means clustering +cluster_df = nearby_venues.drop(columns=['name', 'categories']) + +# calculating the within clusters sum-of-squares for 19 cluster amounts +sum_of_squares = calculate_wcss(cluster_df) + +# This function will return the optimal number of clusters +def optimal_number_of_clusters(wcss): + x1, y1 = 2, wcss[0] + x2, y2 = 20, wcss[len(wcss)-1] + + distances = [] + for i in range(len(wcss)): + x0 = i+2 + y0 = wcss[i] + numerator = abs((y2-y1)*x0 - (x2-x1)*y0 + x2*y1 - y2*x1) + denominator = math.sqrt((y2 - y1)**2 + (x2 - x1)**2) + distances.append(numerator/denominator) + + return distances.index(max(distances)) + 2 + +# calculating the optimal number of clusters +n = optimal_number_of_clusters(sum_of_squares) +#+end_src + +Now that we have found that our optimal number of clusters is six, we +need to perform k-means clustering. When this clustering occurs, each +business is assigned a cluster number from 0 to 5 in the dataframe. + +#+begin_src python +# set number of clusters equal to the optimal number +kclusters = n + +# run k-means clustering +kmeans = KMeans(n_clusters=kclusters, random_state=0).fit(cluster_df) + +# add clustering labels to dataframe +nearby_venues.insert(0, 'Cluster Labels', kmeans.labels_) +#+end_src + +Success! We now have a dataframe with clean business data, along with a +cluster number for each business. Now let's map the data using six +different colors. + +#+begin_src python +# create map with clusters +map_clusters = folium.Map(location=[latitude, longitude], zoom_start=12) +colors = ['#0F9D58', '#DB4437', '#4285F4', '#800080', '#ce12c0', '#171717'] + +# add markers to the map +for lat, lng, name, categories, cluster in zip(nearby_venues['lat'], nearby_venues['lng'], nearby_venues['name'], nearby_venues['categories'], nearby_venues['Cluster Labels']): + label = '[{}] {} ({})'.format(cluster, name, categories) + label = folium.Popup(label, parse_html=True) + folium.CircleMarker( + [lat, lng], + radius=5, + popup=label, + color=colors[int(cluster)], + fill=True, + fill_color=colors[int(cluster)], + fill_opacity=0.7).add_to(map_clusters) + +map_clusters +#+end_src + +* Investigate Clusters + +Now that we have figured out our clusters, let's do a little more +analysis to provide more insight into the clusters. With the information +below, we can see which clusters are more popular for businesses and +which are less popular. The results below show us that clusters 0 +through 3 are popular, while clusters 4 and 5 are not very popular at +all. + +#+begin_src python +# Show how many venues are in each cluster +color_names = ['Dark Green', 'Red', 'Blue', 'Purple', 'Pink', 'Black'] +for x in range(0,6): + print("Color of Cluster", x, ":", color_names[x]) + print("Venues found in Cluster", x, ":", nearby_venues.loc[nearby_venues['Cluster Labels'] == x, nearby_venues.columns[:]].shape[0]) + print("---") +#+end_src + +Our last piece of analysis is to summarize the categories of businesses +within each cluster. With these results, we can clearly see that +restaurants, coffee shops, and grocery stores are the most popular. + +#+begin_src python +# Calculate how many venues there are in each category +# Sort from largest to smallest +temp_df = nearby_venues.drop(columns=['name', 'lat', 'lng']) + +cluster0_grouped = temp_df.loc[temp_df['Cluster Labels'] == 0].groupby(['categories']).count().sort_values(by='Cluster Labels', ascending=False) +cluster1_grouped = temp_df.loc[temp_df['Cluster Labels'] == 1].groupby(['categories']).count().sort_values(by='Cluster Labels', ascending=False) +cluster2_grouped = temp_df.loc[temp_df['Cluster Labels'] == 2].groupby(['categories']).count().sort_values(by='Cluster Labels', ascending=False) +cluster3_grouped = temp_df.loc[temp_df['Cluster Labels'] == 3].groupby(['categories']).count().sort_values(by='Cluster Labels', ascending=False) +cluster4_grouped = temp_df.loc[temp_df['Cluster Labels'] == 4].groupby(['categories']).count().sort_values(by='Cluster Labels', ascending=False) +cluster5_grouped = temp_df.loc[temp_df['Cluster Labels'] == 5].groupby(['categories']).count().sort_values(by='Cluster Labels', ascending=False) + +# show how many venues there are in each cluster (> 1) +with pd.option_context('display.max_rows', None, 'display.max_columns', None): + print("\n\n", "Cluster 0:", "\n", cluster0_grouped.loc[cluster0_grouped['Cluster Labels'] > 1]) + print("\n\n", "Cluster 1:", "\n", cluster1_grouped.loc[cluster1_grouped['Cluster Labels'] > 1]) + print("\n\n", "Cluster 2:", "\n", cluster2_grouped.loc[cluster2_grouped['Cluster Labels'] > 1]) + print("\n\n", "Cluster 3:", "\n", cluster3_grouped.loc[cluster3_grouped['Cluster Labels'] > 1]) + print("\n\n", "Cluster 4:", "\n", cluster4_grouped.loc[cluster4_grouped['Cluster Labels'] > 1]) + print("\n\n", "Cluster 5:", "\n", cluster5_grouped.loc[cluster5_grouped['Cluster Labels'] > 1]) +#+end_src + +* Discussion + +In this project, we gathered location data for Lincoln, Nebraska, USA +and clustered the data using the k-means algorithm in order to identify +the unique clusters of businesses in Lincoln. Through these actions, we +found that there are six unique business clusters in Lincoln and that +two of the clusters are likely unsuitable for investors. The remaining +four clusters have a variety of businesses, but are largely dominated by +restaurants and grocery stores. + +Using this project, investors can now make more informed decisions when +deciding the location and category of business in which to invest. + +Further studies may involve other attributes for business locations, +such as population density, average wealth across the city, or crime +rates. In addition, further studies may include additional location data +and businesses by utilizing multiple sources, such as Google Maps and +OpenStreetMap. |