These are features that are derived from data that requires an understanding of the business domain.
Let's imagine a dataset that contains data for the sale prices of houses in different areas of a city and that our goal is to predict the future price of any house. For this dataset, the input fields are area code, size of the house, floor number, type of house (individual/apartment), age of the property, renovated status, and so on, along with the sale price of the house. The derived features in this scenario are as follows:
- Total sales in the area for the past week, month, and so on
- Location of the house (central area or suburb, based on the area code)
- Livability index (based on the age and renovated columns)
Another example of deriving domain-specific features would be deriving a person's age from their birth date and the current date in a dataset containing information about people.