Creating new variables

A dataset is not only the data you see. There is a lot of information in it. For example, remember in Chapter 6, when we worked with datetime objects during our data exploration exercise, we took the TIME variable and extracted the year, month, day, and hour from it. This is one of the many ways to create new variables.

Here are some examples of new variables created out of our working dataset:

• Arithmetical operators: Adding two or more variables to create a total variable.
• Text extraction: Extracting a meaningful part of a text, for instance, 1234 from ORDER-1234.
• Custom calculations: Calculating a discount rate based on a business rule.
• Binarization: Transforming a variable from on and off to 1 and 0. Binary means two options and is commonly associated with 0 and 1 in computer language.
• Encoding: Transforming a qualitative ordinal variable, such as basic, intermediate, and advanced to 1, 2, and 3.
• One Hot Encoding: A very common...