A binary target is a prediction target with exactly two possible classes or values, commonly encoded as 0 and 1. It turns a continuous business measure, such as listing price, into a classification question. section 4.2.1
Use the target definition to choose an appropriate evaluation strategy:
- A median-based target can be balanced, making accuracy a reasonable performance measure. section 4.2.1
- A mean-based target can become imbalanced when the original price distribution is skewed; ROC-AUC or Average Precision is then preferred. section 4.2.1
Creating two price targets
Encode listings above the mean or median price as 1 and the rest as 0. The median split produces 24,423 positive and 24,472 negative cases, while the mean split produces 14,879 positive and 34,016 negative cases.
