Welcome back to our course - Data Cleaning and Preprocessing in Machine Learning. Today's mission revolves around Feature Engineering on the Titanic dataset. By the end of today's lesson, your toolkit will be loaded with skills that revolve around feature creation, modification, and encoding. Your expertise in Python and Pandas will also be put into practice, reinforcing your knowledge in the process.

Feature engineering is the process of creating optimized features that improve the effectiveness of machine learning algorithms. This process utilizes the data to create new features and modify existing ones. This might involve creating new features, transforming existing features, or identifying and removing irrelevant ones. For instance, in our Titanic dataset, we have properties or indicators like age, sex, pclass, etc., which might need some optimizing.

Let's take sibsp and parch as an example: sibsp shows the number of siblings/spouses aboard while parch shows the number of parents/children onboard. Because these features both indicate the number of family members onboard for each individual, one might see them as similar features or even overlapping. Hence, we can combine these two features to create a new feature: family_size.

To start creating new features, we need to have the Titanic dataset in our hands. This can be quickly done in Python using Seaborn, as shown below:

With the dataset ready, let's compute the family_size feature using the number of siblings/spouses (sibsp) and parents/children (parch).

This snippet of code will create a new column 'family_size' and add it to the dataset titanic_df.

Another valuable task in feature engineering is to modify existing features. For instance, the fare feature in our Titanic dataset may contain values that are significantly larger than the average, making the distribution of fare values skewed. This skewness could be unhelpful for our machine-learning algorithms and might induce overfitting.

In such a case, we can consider applying a log transformation to the fare column, with the aim of reducing skewness. The code snippet for this is shown below:

Here, we add 0.1 to the fare column to adjust for zero values, then apply a logarithmic transformation.

Machine Learning algorithms generally deal with numbers and not text. Therefore, in handling categorical features, it is important to change text values to numerical ones. The process of doing this is called encoding. For our Titanic dataset, we can perform One-Hot Encoding on the 'sex' column:

Here, we are using the pd.get_dummies() function to perform One-Hot Encoding on the sexcolumn. This results in a new dataframe sex_dummies where each category in the sex column has its own column in the new dataframe.

Fantastic work today! You have delved into feature engineering with Python and Pandas, and you've been introduced to creating new features from scratch, modifying existing ones, and handling categorical features. Combining all these techniques, the cleaned, processed data can now be appropriately structured and ready to feed into a machine learning model for training. I almost forgot - let's go do some practice!