A researcher creates a set of four reference-group variables to include in a regression. What can you assume about the variable from which she built these variables?
A) It likely had three categories
B) It likely had four categories
C) It likely had five categories
D) It likely had six categories

Question

Quizplus · Accepted Answer

When creating reference-group variables (also known as dummy variables) for inclusion in a regression analysis, one less than the total number of categories is used. This is because one category is used as the reference or baseline group. Therefore, if there are four reference-group variables, the original variable likely had five categories.

A Researcher Creates a Set of Four Reference-Group Variables to Include