Target analysis examines a prediction target’s values and distribution before modeling. It matters because targets with many zeros, fat tails, or multiple modes can cause some algorithms to underfit. section 4.2.1
A practical target-analysis workflow includes:
- Plot the target with a histogram to reveal concentration, peaks, skew, and long tails. section 4.2.1
- Use a boxplot to locate the core distribution and identify extreme values. section 4.2.1
- Compare transformations or restricted ranges when extreme values obscure the main pattern; a log transformation can make price more symmetrical but may leave tail extremes. section 4.2.1
- Choose a target formulation deliberately: continuous regression, binary classification using a mean or median threshold, or multiclass bins such as price quintiles. section 4.2.1
data[["price"]].hist(bins=10)
A pandas histogram provides the first visual check of target concentration and skew. section 4.2.1
