dummy variable, define
Mar. 10th, 2020 02:13 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
kay_mulan"In statistics and econometrics, particularly in regression analysis, a dummy variable[a] is one that takes only the value 0 or 1 to indicate the absence or presence of some categorical effect that may be expected to shift the outcome.[2][3] They can be thought of as numeric stand-ins for qualitative facts in a regression model, sorting data into mutually exclusive categories (such as smoker and non-smoker).[4]
A dummy independent variable (also called a dummy explanatory variable) which for some observation has a value of 0 will cause that variable's coefficient to have no role in influencing the dependent variable, while when the dummy takes on a value 1 its coefficient acts to alter the intercept. For example, suppose membership in a group is one of the qualitative variables relevant to a regression. If group membership is arbitrarily assigned the value of 1, then all others would get the value 0. Then the intercept would be the constant term for non-members but would be the constant term plus the coefficient of the membership dummy in the case of group members.[5]
Dummy variables are used frequently in time series analysis with regime switching, seasonal analysis and qualitative data applications."
https://en.wikipedia.org/wiki/Dummy_variable_(statistics)
A dummy independent variable (also called a dummy explanatory variable) which for some observation has a value of 0 will cause that variable's coefficient to have no role in influencing the dependent variable, while when the dummy takes on a value 1 its coefficient acts to alter the intercept. For example, suppose membership in a group is one of the qualitative variables relevant to a regression. If group membership is arbitrarily assigned the value of 1, then all others would get the value 0. Then the intercept would be the constant term for non-members but would be the constant term plus the coefficient of the membership dummy in the case of group members.[5]
Dummy variables are used frequently in time series analysis with regime switching, seasonal analysis and qualitative data applications."
https://en.wikipedia.org/wiki/Dummy_variable_(statistics)
