Outlier detection for mixed-type data: A novel approach

Outlier detection can serve as an extremely important tool for researchers from a wide range of fields. From the sectors of banking and marketing to the social sciences and healthcare sectors, outlier detection techniques are very useful for identifying subjects that exhibit different and sometimes peculiar behaviours. When the data set available to the researcher consists of both discrete and continuous variables, outlier detection presents unprecedented challenges. In this paper we propose a novel method that detects outlying observations in settings of mixed-type data, while reducing the required user interaction which can lead to misleading findings caused by subjectivity. The methodology developed is being assessed through a series of simulations on data sets with varying characteristics and achieves very good performance levels. Our method demonstrates a high capacity for detecting the majority of outliers while minimising the number of falsely detected non-outlying observations. The ideas and techniques outlined in the paper can be used either as a pre-processing step or in tandem with other data mining and machine learning algorithms for developing novel approaches to challenging research problems.