Chapter 7: Classification

As you learned how to go about predicting numerical values in the previous chapter, in this chapter, we will turn our attention to predicting categorical ones. Essentially, that is what classification is: predicting future categorical values. While prediction focuses on estimating what some numerical values will be in the future, classification predicts the occurrence or non-occurrence of events in the future. For instance, in this chapter, we will see how classification can predict whether an individual will default on their loan or not.

In this chapter, we will also discuss the procedural similarities and differences between prediction and classification and will cover two of the most famous classification algorithms: Decision Trees and K-Nearest Neighbors (KNN). While this chapter provides a fundamental understanding of classification algorithms and also shows how they are done using Python, this chapter cannot be looked at as a comprehensive reference...