Hope Hernandez is the new regional Vice President for a large gasoline station chain.She wants a regression model to predict sales in the convenience stores.Her data set includes two qualitative variables: the gasoline station location (inner city, freeway, and suburbs), and curb appeal of the convenience store (low, medium, and high).The number of dummy variables needed for "curb appeal" in Hope's regression model is ______.
A)1
B)2
C)3
D)4
E)5

Question

Quizplus · Accepted Answer

For a qualitative variable with n categories, the number of dummy variables needed is n-1. Since "curb appeal" has 3 categories (low, medium, high), 3-1 = 2 dummy variables are needed.

Hope Hernandez Is the New Regional Vice President for a Large