Categorical features: how to explain "Moscow" to a neural network
Neural networks work with numbers. "Moscow", "Berlin", "Tokyo" are not numbers. The encoding task is to turn a category into a number without introducing a false order. If you tell the model Moscow=1, Berlin=2, Tokyo=3, it will infer that Tokyo is "three times larger" than Moscow. That is not true. Choosing the right encoding method has a serious impact on model quality.
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