Question 1

What does a dummy-variable regression analysis examine?
A) The relationship between one continuous dependent and one continuous variable
B) The relationship between one categorical dependent and one continuous independent variable
C) The relationship between one continuous dependent and one categorical independent variable
D) The relationship between one continuous dependent and one dichotomous variable

Accepted Answer

C,D

Question 2

Which of the following is incorrect?
A) Regression with one dummy variable (predictor) corresponds directly to an independent analysis of variance (ANOVA)
B) Regression with more than one dummy variable including a covariate corresponds directly to an independent analysis of covariance (ANVOCA)
C) Regression with more than one dummy variable (predictor) corresponds directly to an independent analysis of variance (ANOVA)
D) Regression with one dummy variable (predictor) corresponds directly to an independent t-test

Accepted Answer

A

Question 3

Which of the following procedures can be used to compare the means of the included groups in a dummy-variable regression model?
A) Changing the reference group
B) Linear combination
C) Standardization
D) Not possible

Accepted Answer

A,B

Question 4

Why is the number of dummy variables to be entered into the regression model always equal to the number of groups (g) minus 1 (g−1)?
A) To avoid model misspecification
B) To increase the R-squared value
C) To avoid the situation of perfect multicollinearity
D) To control other variables in the model

Accepted Answer

Including g dummy variables for g groups would lead to perfect multicollinearity, as the sum of all dummy variables would equal one, making one of them redundant. By using g-1 dummy variables, we avoid this issue and maintain a full rank matrix.

Question 5

How do we interpret a dummy variable coefficient?
A) The difference between two means
B) The difference between two coefficients
C) The difference between two R-squared values
D) None of these

Accepted Answer

A dummy variable coefficient represents the difference in the mean of the dependent variable between the group represented by the dummy variable and the reference group.

Quiz 5: Dummy-Variable Regression

What does a dummy-variable regression analysis examine?

Which of the following is incorrect?

Which of the following procedures can be used to compare the means of the included groups in a dummy-variable regression model?

Why is the number of dummy variables to be entered into the regression model always equal to the number of groups (g) minus 1 (g−1) ?

How do we interpret a dummy variable coefficient?