Encoding for k-level qualitatative variable I have a qualitative variable, e.g. userId, which could take around 30,000 different coded values ($k$). I would like to represent this variable as a dummy variable. Coding this into a vector of size $k$ doesn't seem to be a good approach. Is there a more compact method for coding for this variable?
There is always clustering techniques you could do that would help you determine how to group userId into a dummy variable.