6/29/2021 Loss Functions in Deep Learning | MLearning.

ai

Loss Functions in Deep Learning

A Guide on the Concept of Loss Functions in Deep Learning — What they are, Why we
need them…

Artem Oppermann Follow

Mar 7 · 10 min read

Source: https://unsplash.com/photos/yNvVnPcurD8

This in-depth article addresses the questions of why we need loss functions in deep
learning and which loss functions should be used for which tasks.

In Short: Loss functions in deep learning are used to measure how well a neural network
model performs a certain task.

https://medium.com/mlearning-ai/loss-functions-in-deep-learning-e566a0ef927e 1/14
6/29/2021 Loss Functions in Deep Learning | MLearning.ai

Table of Content

1. Why do we need Loss Functions in Deep Learning?

2. Mean Squared Error Loss Function

3. Cross-Entropy Loss Function

4. Mean Absolute Percentage Error

5. Take-Home-Message

1. Why do we need Loss Functions in Deep Learning?

Before we discuss different kinds of loss functions used in Deep Learning, it would be a
good idea to address the question of why we need loss functions in the first place.

I think you must be familiar by now with the mathematical operations which are
happening inside a neural network. Basically, there are just two:

Forward Propagation

Backpropagation with Gradient Descent

While forward propagation refers to the computational process of predicting an output

for a given input vector x, backpropagation and gradient descent describe the process of
improving the weights and biases of the network in order to make better predictions.

Recap: Forward Propagation

https://medium.com/mlearning-ai/loss-functions-in-deep-learning-e566a0ef927e 2/14
6/29/2021 Loss Functions in Deep Learning | MLearning.ai

For a more in-depth explanation of Forward Propagation and Backpropagation in neural

networks, please refer to my other article What is Deep Learning and How does it work?

For a given input vector x the neural network predicts an output, which is generally
called a prediction vector y.

Fig, 1. Feedforward neural network. Source: Author’s own image.

The equations which describe the mathematics that is happening during the
computation of the prediction vector loos as follows:

Eq.1 Forward propagation. Source: Author’s own image.

We must compute a dot-product between the input vector x and the weight matrix W1
that connects the first layers with the second. After that, we apply a non-linear
activation function to the result of the dot-product. (A detailed guide on the different
https://medium.com/mlearning-ai/loss-functions-in-deep-learning-e566a0ef927e 3/14
6/29/2021 Loss Functions in Deep Learning | MLearning.ai

activation functions in deep learning can be found in my other article Activation

Functions in Deep Learning)

Depending on the task we want the network to do, this prediction vector represents
different things. For regression tasks, which are basically predictions of continuous
variables (e.g. stock price, expected demand for products) the output vector y would
contain continuous numbers.

For classification tasks, on the other hand, such as customer segmentation or image
classification the output vector y would represent probability scores between 0.0 and
1.0.

The value that we want the neural network to predict is called a ground truth label,
which is usually represented as y_hat. A predicted value y that is closer to the label
suggests a better performance of the neural network.

Regardless of the task, we somehow have to measure how close our predictions are to
the ground truth label.

This is where the concept of a loss function comes into play.

Mathematically, we can measure the difference (or error) between the prediction vector
y and the label y_hat by defining a loss function which value depends on this difference.

An example of a general loss function is the quadratic loss:

Eq. 2 Quadratic loss function. Source: Authors own image.

Since the prediction vector y(θ) is a function of the weights of the neural network
(which we abbreviate to θ), the loss is also a function of the weights.

The value of this loss function depends on the difference between the label y_hat and y.
A higher difference means a higher loss value, a smaller difference means a smaller loss

https://medium.com/mlearning-ai/loss-functions-in-deep-learning-e566a0ef927e 4/14
6/29/2021 Loss Functions in Deep Learning | MLearning.ai

value. Minimizing the loss function directly leads to more accurate predictions of the
neural network, as the difference between the prediction and the label decreases.

In fact, the minimization of the loss function is the only objective that the neural
network tries to achieve.

A neural network solves tasks without being explicitly programmed with a task-specific
rule. This is possible because minimizing the loss function as a goal is universal and does
not depend on the task or task circumstances.

Minimizing the loss function automatically causes

the neural network model to make better
predictions regardless of the exact characteristics of
the task at hand.
You only have to select the right loss function for the task. From my experience, I can tell
that there, fortunately, are only three loss functions that you should know about to solve
almost any problem that you will encounter in practice. We will discuss these loss
functions in the following.

Since the loss depends on the weights, we must find a certain set of weights for which
the value of the loss function is as small as possible. The method of minimizing the loss
function is achieved mathematically by a method called gradient descent. (If you are
interested in this topic please refer to the article What is Deep Learning and how does it
work?, Where I explain gradient descent in much more detail.)

If we have found a proper loss function to measure the error the neural network makes,
we can proceed with the backpropagation and gradient descent step where we improve
the weights and biases of the network. However, this topic is not important for this
article right now.

Previously I introduced the squared error loss function which I used to give you a better
understanding of the general concept of a loss function. Now I will extend your

https://medium.com/mlearning-ai/loss-functions-in-deep-learning-e566a0ef927e 5/14
6/29/2021 Loss Functions in Deep Learning | MLearning.ai

knowledge and present to you three of the most common loss functions that are used in
the field of deep learning. The first one is called the mean squared error.

2. Mean Squared Error Loss Function

Mean squared error (MSE) loss function is the sum of squared differences between the
entries in the prediction vector y and the ground truth vector y_hat.

Eq. 3 MSE Loss Function. Source: Author’s own image.

The sum of squared differences is divided by N, which corresponds to the length of the
vectors. If the output y of your neural network is a vector with multiple entries then N is
the number of the vector entries and y_i being one particular entry in the output vector.

When should You use Mean Squared Error loss?

The mean squared error loss function is the perfect loss function if you are dealing with
a regression problem. That is if you want your neural network to predict a continuous
scalar value.

An example of a regression problem would be predictions of …

… the number of products needed in a supply chain

… future real estate prices under certain market conditions,

… a stock value.

Here is a code snippet where MSE loss is calculated in python:

https://medium.com/mlearning-ai/loss-functions-in-deep-learning-e566a0ef927e 6/14
6/29/2021 Loss Functions in Deep Learning | MLearning.ai

3. Cross-Entropy Loss Function

Regression is only one of two areas where feedforward networks enjoy great popularity.
The other area is classification.

In classification tasks, we are dealing with predictions of probabilities. Meaning the

output of a neural network must be in a range between 0 and 1. A loss function that can
measure the error between a predicted probability and the label which represents the
actual class is called the cross-entropy loss function.

One important thing that we need to discuss before continuing with the cross-entropy is
how exactly the ground truth vector does look like in the case of a classification
problem.

https://medium.com/mlearning-ai/loss-functions-in-deep-learning-e566a0ef927e 7/14
6/29/2021 Loss Functions in Deep Learning | MLearning.ai

Fig. 2 One-hot-encoded vector (left), prediction vector (right). Source: Authors own image.

The label vector y_hat is one-hot-encoded which means that the values in this vector can
only take discrete values of either 0 or 1. The entries in this vector represent different
classes. The values of these entries are zero, except for one entry which is one. This
entry of 1 tells us the class, we want to classify the input feature vector x into.

The prediction y, however, can take continuous values between 0 and 1.

Given the prediction vector y and the ground truth vector y_hat you can compute the
cross-entropy loss between those two vectors as follows:

Eq. 4 Cross-entropy loss function. Source: Author’s own image.

First, we need to sum up the products between the entries of the label vector y_hat and
the logarithms of the entries of the predictions vector y. In the second step, we must
negate the sum to get a positive value of the loss function.

https://medium.com/mlearning-ai/loss-functions-in-deep-learning-e566a0ef927e 8/14
6/29/2021 Loss Functions in Deep Learning | MLearning.ai

One interesting thing to consider is the plot of the cross-entropy loss function. In the
following graph, the can see the value of the loss function (y-axis) vs. the predicted
probability y_i. y_i takes values between 0 and 1.

Fig. 3. Cross-Entropy function depending on prediction value. Source: Authors own image.

We can clearly see that the cross-entropy loss function grows exponentially for lower
values of the predicted probability y_i. For y_i=0 the function becomes infinite, while
for y_i=1 the neural network makes an accurate probability prediction and the loss
value goes to zero.

Here is once more a code snippet in python, where the cross-entropy loss function is
calculated:

https://medium.com/mlearning-ai/loss-functions-in-deep-learning-e566a0ef927e 9/14
6/29/2021 Loss Functions in Deep Learning | MLearning.ai

When should You use Cross-Entropy loss?

You should always use cross-entropy loss if

probabilities are involved. Meaning if you are doing
some kind of classification.
Another thing to remember is that the label vector is one hot encoded and the values in
this vector can only take discrete values of either a 0 or 1. The entries in this vector
represent different classes.

The values of the entries are zero, except for one entry which is one. This entry tells us
the class, we want to classify the input features into.

The prediction, however, can take continuous values between 0 and 1.

4. Mean Absolute Percentage Error

The third loss function that I would like to present to you is the Mean Absolute
Percentage Error (MAPE) loss function. This loss function gets not that much attention
in deep learning. It is used for the most part to measure the performance of a neural
network during demand forecasting tasks.

But first, what is demand forecasting?

https://medium.com/mlearning-ai/loss-functions-in-deep-learning-e566a0ef927e 10/14
6/29/2021 Loss Functions in Deep Learning | MLearning.ai

Demand forecasting is the area of predictive analytics dedicated to predicting the

expected demand for a good or service in the near future. For example:

In retail, one can use demand forecasting models to determine the amount of
particular product that should be available and at what price

In Industrial manufacturing, it could be predicted how much of each product should

be produced, the amount of stock that should be available at various points in time,
when maintenance should be performed

In the travel and tourism industry demand forecasting models could be used to
assess, in light of available capacity, what price should be assigned (for hotels,
flights), which destinations should be highlighted, what types of packages should be
advertised, etc.

Although demand forecasting is also a regression task and the minimization of the MSE
loss function is an adequate training goal, this type of loss function to measure the
performance of the model during training is not suitable for demand forecasting.

Why is that?

Well, imagine the MSE loss function gives you a value of 100. Can you tell if this is
generally a good result? No, because it depends on the situation. If the prediction y of
the model is 1000 and the actual ground truth label y_hat is 1010, then the MSE loss of
100 would be in fact a very small error and the performance of the model would be quite
good.

However in the case where the prediction would be 5 and the label is 15, you would
have the same loss value of 100 but the relative deviation to the ground-truth value
would be much higher than in the previous case.

This example shows the shortcoming of the mean squared error function as the loss
function for the demand forecasting models. For this reason, I would strongly
recommend using another loss function, such as Mean Absolute Percentage Error
(MAPE).

https://medium.com/mlearning-ai/loss-functions-in-deep-learning-e566a0ef927e 11/14
6/29/2021 Loss Functions in Deep Learning | MLearning.ai

The mean absolute percentage error, also known as mean absolute percentage deviation
(MAPD) usually expresses accuracy as a percentage, and is defined by the following
equation:

Source: Authors own image.

In this equation, y_i is the predicted value and y_hat is the label. The difference between
y_i and y_hat is divided by the actual value y_hat again. Multiplying by 100% makes it a
percentage error.

Applying this equation to the previous example gives you a more meaningful answer to
the model’s performance. In the first case, the deviation from the ground truth label
would be only 1%, while in the second case the deviation would be 66%:

Source: Authors own image.

We see that the performance of these two models is very different. In the meantime, the
MSE loss function would indicate that the performance of both models is the same.

The following python code snipped shows how MAPE can be calculated:

https://medium.com/mlearning-ai/loss-functions-in-deep-learning-e566a0ef927e 12/14
6/29/2021 Loss Functions in Deep Learning | MLearning.ai

When should you use MAPE?

Mean Absolute Percentage Error loss function should be used during demand
forecasting tasks to evaluate the performance of the model during training time

Meanwhile, the minimization of the MSE loss function can still be used as a training
objective

Take-Home-Message
A loss function measures how good a neural network model is in performing a
certain task, which in most cases is regression or classification

We must minimize the value of the loss function during the backpropagation step in
order to make the neural network better

The cross-entropy loss function is only used in classification tasks when we want the
neural network to predict probabilities

For regression tasks, when we want the network to predict continuous numbers we
must use the mean squared error loss function

Mean Absolute Percentage Error loss function is used during demand forecasting to
keep an eye on the performance of the network during training time

Sign up for AI & ART

By MLearning.ai

A weekly collection of the best news and resources on AI & ART Take a look.

https://medium.com/mlearning-ai/loss-functions-in-deep-learning-e566a0ef927e 13/14
6/29/2021 Loss Functions in Deep Learning | MLearning.ai

Emails will be sent to [email protected].

Get this newsletter
Not you?

Machine Learning Artificial Intelligence Data Science Towards Data Science Deep Learning

AboutWriteHelpLegal

Get the Medium app

https://medium.com/mlearning-ai/loss-functions-in-deep-learning-e566a0ef927e 14/14