If a qualitative variable has 4 categories, how many dummy variables must be created and used in the regression analysis?
A)3
B)4
C)5
D)6
E)7

Name: If a qualitative variable has 4 categories, how many dummy variables must be created and used in the regression analysis? A)3 B)4 C)5 D)6 E)7
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Question

Quizplus · Accepted Answer

When using dummy variables for regression analysis, one less than the number of categories is needed to avoid multicollinearity. Therefore, for 4 categories, 3 dummy variables are required.

If a Qualitative Variable Has 4 Categories, How Many Dummy