Dummy encoding: In order to represent a categorical variable in a machine learning model, it usually must be somehow coded numerically before it is used in the training of a model. The easiest way to do so is to create a series of dummy variables (k-1 dummies for a variable with k distinct categories) that take on a value of 1 when the original field is equal to the kth category and 0 otherwise. As one level can be represented when all of the dummy variables are set to 0, there should be one less dummy variable compared to the total number of unique categories of the variable to avoid redundancy. An illustration of dummy variable transformation is shown below, assuming the four categories for country are the only unique values present in the dataset.
