dummy variable

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“A variable that is assigned discrete values (often zero and one) to represent various events or characteristics. For example, a variable Fall could be defined as 1 for the fall months and 0 for others; then used to estimate seasonal variations. Be careful when adding multiple dummy variables to a problem because they can lead to exact multicollinearity. For example, dummy variables for Fall, Winter, Spring, and Summer would cover all of the cases for a year and all four cannot be used if an intercept term is also used.”

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By |February 1st, 2019|Comments Off on dummy variable