Example: red paprica and green paprica. The output I need is just paprica, should i label them the same or give them two labels "green paprica" and "red paprica" and leater on just treat them as one? Other example: 5 cent coin, "heads" and "tails". Output i need is just 5 cent coin. From machine learning point of course. Are there downsides and upsides of splitting labels or keeping them together in terms of accuracy?
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If you only need to predict whether an object is a pepper or not why bother predicting whether it is a red pepper or a green pepper, you are making your problem more complicated than it needs to be. In my opinion you should try to make the problem you want to solve as simple as possible so I would advise using the shortest label possible as long as it solves your problem.