I am thinking about a problem which is to predict log(spend) of a customer using linear regression.
I am considering what features to use as input and wondering if it would be OK to use the percentile of a variable as inputs.
For example I could use the companies revenue as a input. What I'm wondering is whether I could use the company revenue percentile instead.
Another example would be a categorical industry classifier (NAICS) - if I were to look at median spend per NAICS code and then assign each NAICS code to a 'NAICS Percentile', would that be a valid explanatory variable I could use?
Just wondering if there are any issues to be aware of when using percentiles? Is it in some ways equivalent to a type of feature scaling?