A dummy variable is:
A) a variable with a low t-stat and high p-value.
B) a placeholder for a variable to be gathered later.
C) a dichotomous variable that is used to indicate the presence or absence of a characteristic.
D) an unbiased estimate of the true variable.

Question

Quizplus · Accepted Answer

A dummy variable is a type of binary variable that represents the presence or absence of a characteristic. It is typically used in regression analysis to model the effect of that characteristic on some outcome of interest.

A Dummy Variable Is