Calculating Distance with Categorical Predictors. This exercise with a tiny dataset illustrates the calculation of Euclidean distance and the creation of binary dummies. The online education company Statistics.com segments its customers and prospects into three main categories: IT professionals (IT), statisticians (Stat), and other (Other). It also tracks, for each customer, the number of years since first contact (years). Consider the following customers; information about whether they have taken a course or not (the target attribute to be predicted) is included:

Customer 1: Stat, 1 year, did not take course Customer 2: Other,