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I have a dataset with 3 independent variables [city, industry, amount] and wish to normalize the amount. But I wish to do it with respect to industry and city. Simply grouping by the city and industry gives me a lot of very sparse groups on which normalizing (min-max, etc.) wouldn't be very meaningful. Is there any better way to normalize it?

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  • $\begingroup$ what's the purpose? is there a potential workaround that doesn't require normalizing? welcome to the site $\endgroup$
    – oW_
    Commented Sep 12, 2018 at 17:23

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Normalization is typically done to each feature separately.

Normalization means different operations for numerical vs. categorical data. It appears amount is numerical. As you mention, amount could be min-max rescaled. City and industry appear to be categorical. Categorical normalization typically means grouping related entities together. That is often a manual process.

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