If a qualitative variable has c categories, then only (c

Name: If a qualitative variable has c categories, then only (c - 1)dummy variables must be included in the regression model.
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Question

If a qualitative variable has c categories, then only (c - 1)dummy variables must be included in the regression model.

Quizplus · Accepted Answer

In regression analysis, to avoid the dummy variable trap (perfect multicollinearity), one less than the total number of categories (c - 1) is used to ensure the model is correctly specified.