I am working on a machine learning scenario where the target variable is Duration of power outages.
The distribution of the target variable is severely skewed right (You can imagine most power outages occur and are over with fairly quick, but then there are many, many outliers that can last much longer) A lot of these power outages become less and less 'explainable' by data as the durations get longer and longer. They become more or less, 'unique outages', where events are occurring on site that are not necessarily 'typical' of other outages nor is data recorded on the specifics of those events outside of what's already available for all other 'typical' outages.
This causes a problem when creating models. This unexplainable data mingles in with the explainable parts and skews the models ability to predict as well.
I analyzed some percentiles to decide on a point that I considered to encompass as many outages as possible while I still believed that the duration was going to be mostly explainable. This was somewhere around the 320 minute mark and contained about 90% of the outages.
This was completely subjective to my opinion though and I know there has to be some kind of procedure in order to determine a 'best' cut-off point for this target variable. Ideally, I would like this procedure to be robust enough to consider the trade-off of encompassing as much data as possible and not telling me to make my cut-off 2 hours and thus cutting out a significant amount of customers as the purpose of this is to provide an accurate Estimated Restoration Time to as many customers as possible.
FYI: The methods of modeling I am using that appear to be working the best right now are random forests and conditional random forests. Methods I have used in this scenario include multiple linear regression, decision trees, random forests, and conditional random forests. MLR was by far the least effective. :(
I have exactly the same problem! I hope someone more informed brings his knowledge. I wander to what point is a long duration something that we want to discard or that we want to predict! Also, I tried treating my data by log transforming it, and the density plot shows a funny artifact on the left side of the distribution ( because I only have durations of integer numbers, not floats). I think this helps, you also should log transform the features that have similar distributions.
I finally thought that the solution should be stratified sampling or giving weights to features, but I don't know exactly how to implement that. My tries didn't produce any good results. Perhaps my data is too stochastic!