What neighborhood do you reside in? What drug had been you prescribed? Why did you cancel your streaming subscription? Nowadays, there’s a code for that, saved in databases by no matter governments businesses, companies, and so on. you work together with. When you work in knowledge, you in all probability encounter many such codes. After they can take many doable values, such codes are known as “excessive cardinality categorical options”.
Some high-cardinality categoricals have a hierarchical construction. Determine 1 depicts such a construction, the North American Trade Classification System (NAICS), which is utilized by the US authorities to categorise companies [1].
Many code units may be represented as a hierarchy. For instance, US geographic areas may be divided into smaller areas with many code values (zip codes), or very massive ones with few (US Census areas, e.g. “West”). Or, the American Medical Affiliation defines ~475 areas of supplier specialization, that are rolled up into classifications, groupings, and sections.