Stage 1 · Lesson 4 of 6
Descriptive, diagnostic, predictive, prescriptive
Analysis comes in four broad kinds. analysis says what happened, such as revenue by month. Diagnostic analysis asks why: revenue fell because repeat customers dropped after a price change.
Predictive analysis estimates what will happen next. Prescriptive analysis recommends what to do. Most entry-level analyst work is descriptive and diagnostic, and doing it well is valuable.
Naming the kind you are doing sets expectations with the people asking. It also decides your method. A diagnostic question needs you to compare (groups such as regions or customer types) and think carefully about causes. A alone will not answer it.
Common trappresenting a descriptive chart as if it explains why something happened, or extending a trend line into the future and calling it a forecast without stating any assumptions.
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