Revolutionizing K-Nearest Neighbor Distance Measurements for Enhanced Credit Scoring


ÇETİN A. İ., BÜYÜKLÜ A. H.

10th International Conference on Computational and Experimental Science and Engineering, Antalya, Turkey, 27 - 30 October 2023, pp.202, (Summary Text)

  • Publication Type: Conference Paper / Summary Text
  • City: Antalya
  • Country: Turkey
  • Page Numbers: pp.202
  • Ankara Yıldırım Beyazıt University Affiliated: Yes

Abstract

The k-Nearest Neighbors (kNN) algorithm is a fundamental tool in machine learning, yet its performance hinges on the accurate computation of distances, often via the Euclidean distance metric. This research seeks to enhance the kNN algorithm by optimizing this metric through an adaptive model that adjusts the distance calculation based on dataset-specific attributes, improving upon the rigidity of the traditional Euclidean metric. Our method, when applied to a unique sovereign credit rating dataset, showed significant improvements in predictive accuracy and computational efficiency, validating the efficacy of this approach. Our model extends beyond traditional kNN by integrating feature importance weighting from the Random Forest algorithm, which provides a nuanced measure of sample proximity and improves classification performance. The results of this research have far-reaching implications for machine learning and data mining, particularly in high-stakes prediction accuracy scenarios. They highlight the potential of dynamic distance metrics and hybrid models in enhancing algorithmic performance. Future research will focus on validating the effectiveness of this optimized distance metric across diverse datasets, affirming the versatility of our adaptive model and its implications for the kNN algorithm.