Hands-On Data Science for Marketing

Categorical variable encoding

If you look closely at the data, the following columns are categorical variables in our dataset:

## 2.2. Categorical FeaturescategoricalVars = c(  'Sales.Channel', 'Vehicle.Size', 'Vehicle.Class', 'Policy', 'Policy.Type',  'EmploymentStatus', 'Marital.Status', 'Education', 'Coverage', 'Gender')

These variables have a set of different values they can take and these values do not necessarily have orders that differentiate one from another.

If you recall from Chapter 4, From Engagement to Conversion, we discussed how we can create factor variables for such categorical variables in R. In this chapter, the method we are going to use is to create dummy variables for each category of individual categorical variables, ...