I am reading a presentation and it recommends not using leave one out encoding, but it is okay with one hot encoding. I thought they both were the same. Can anyone describe what the differences between them are?
They are probably using "leave one out encoding" to refer to Owen Zhang's strategy.
The encoded column is not a conventional dummy variable, but instead is the mean response over all rows for this categorical level, excluding the row itself. This gives you the advantage of having a one-column representation of the categorical while avoiding direct response leakage