Classification Algorithms

Classification is a Machine Learning technique that uses known data to determine how to classify new data in a set of existing categories. This technique includes a set of algorithms that we can use to determine how the new data should be classified under a set of labels, classes, or categories using known data. This chapter examines the theory behind the various classification algorithms and presents an example of a sharing economy company to explain how these methods work in the business world. The classification algorithms include decision trees, Naïve Bayes algorithm, and Support Vector Machine algorithm. In addition to these three classification algorithms, several other algorithms are also used to analyze large amounts of various kinds of data. In particular, these include k nearest neighbors, random forest and neural networks. Random Forest model is most effective for predicting Airbnb prices because it is easier to identify important predictors.