Posts Tagged ‘ impact models ’

Modeling Trick: Impact Coding of Categorical Variables with Many Levels

July 23, 2012
By
Modeling Trick: Impact Coding of Categorical Variables with Many Levels

One of the shortcomings of regression (both linear and logistic) is that it doesn’t handle categorical variables with a very large number of possible values (for example, postal codes). You can get around this, of course, by going to another modeling technique, such as Naive Bayes; however, you lose some of the advantages of regression Related posts:

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