What I often do is that I check boxplots and histograms for target/dependent variable and after much caution, treat/remove the outliers. But this is what I do only for the target variable. I.e., if considered the removal, I'd simply drop the entire row where my target value was found outlying.
Suppose if I am having outliers in some independent variables as well. What should I do there?
- Should I ignore them?
- Should I take the same approach with Independent variables as I took with the target variable?
Take the following example. Assume that we are predicting the expenditure of customers
target_expenditure_USD. Other variables are Independent Variables