Handling categorical data

So far, we have only been working with numerical values. However, it is not uncommon that real-world datasets contain one or more categorical feature columns. In this section, we will make use of simple yet effective examples to see how we deal with this type of data in numerical computing libraries.

Nominal and ordinal features

When we are talking about categorical data, we have to further distinguish between nominal and ordinal features. Ordinal features can be understood as categorical values that can be sorted or ordered. For example, t-shirt size would be an ordinal feature, because we can define an order XL > L > M. In contrast, nominal features don't imply any order and, to continue with the previous example, we could think of t-shirt color as a nominal feature since it typically doesn't make sense to say that, for example, red is larger than blue.

Creating an example dataset

Before we explore different techniques to handle such categorical data, let's...