Which of the following explanations justifies this suggestion?

An organization is developing a feature repository and is electing to one-hot encode all categorical feature variables. A data scientist suggests that the categorical feature variables should not be one-hot encoded within the feature repository.

Which of the following explanations justifies this suggestion?
A . One-hot encoding is not supported by most machine learning libraries.
B . One-hot encoding is dependent on the target variable’s values which differ for each application.
C . One-hot encoding is computationally intensive and should only be performed on small samples of
training sets for individual machine learning problems.
D . One-hot encoding is not a common strategy for representing categorical feature variables numerically.
E . One-hot encoding is a potentially problematic categorical variable strategy for some machine learning algorithms.

Answer: E

Explanation:

One-hot encoding transforms categorical variables into a format that can be provided to machine learning algorithms to better predict the output. However, when done prematurely or universally within a feature repository, it can be problematic:

Dimensionality Increase: One-hot encoding significantly increases the feature space, especially with high cardinality features, which can lead to high memory consumption and slower computation. Model Specificity: Some models handle categorical variables natively (like decision trees and boosting algorithms), and premature one-hot encoding can lead to inefficiency and loss of information (e.g., ordinal relationships).

Sparse Matrix Issue: It often results in a sparse matrix where most values are zero, which can be inefficient in both storage and computation for some algorithms.

Generalization vs. Specificity: Encoding should ideally be tailored to specific models and use cases rather than applied generally in a feature repository.

Reference

"Feature Engineering and Selection: A Practical Approach for Predictive Models" by Max Kuhn and Kjell Johnson (CRC Press, 2019).