A dummy variable is used as an independent variable in a regression model when
A) two independent variables interact.
B) the variable involved is categorical.
C) the variable involved is numerical.
D) a curvilinear relationship is suspected.

Question

Quizplus · Accepted Answer

Dummy variables are used to represent categorical variables in regression models. They allow us to include qualitative information as quantitative variables, making it easier to analyze and interpret the data. When a variable is categorical, it cannot be included in the model as is, and therefore must be transformed into a set of dummy variables.

A Dummy Variable Is Used as an Independent Variable in a Regression