7.2 Statistical and Machine Learning Methods

• Several pre-analysis steps are common to many methods

7.2.1 Exploratory Data Analysis

• Aim is to understand the data
• Descriptive statistics of central tendencies and variation
• Basic plots of distributions / skewness (histograms)
• Correlation plots

7.2.2 Feature Engineering / Transforming Variables

• Reducing skew (log or other transformation)
• Encoding category variables as dummies
• Creating new predictor variables, interaction terms
• Centering / Scaling Variables