Encoding categorical variables: one-hot and beyond

R has "one-hot" encoding hidden in most of its modeling paths. Asking an R user where one-hot encoding is used is like asking a fish where there is water; they can't point to it as it is everywhere. Much of the encoding in R is essentially based on "contrasts" implemented in stats::model.matrix() Note: do not use base::data.matrix() The above mal-coding can be a critical flaw when you are building a model and then later using the model on new data (be it cross-validation data, test data, or future application data). Many R users are not familiar with the above issue as encoding is hidden in model training, and how to encode new data is stored as part of the model.