<P> Dummy variables are `` proxy '' variables or numeric stand - ins for qualitative facts in a regression model . In regression analysis , the dependent variables may be influenced not only by quantitative variables ( income , output , prices , etc . ) , but also by qualitative variables ( gender , religion , geographic region , etc . ) . A dummy independent variable ( also called a dummy explanatory variable ) which for some observation has a value of 0 will cause that variable 's coefficient to have no role in influencing the dependent variable , while when the dummy takes on a value 1 its coefficient acts to alter the intercept . For example , suppose membership in a group is one of the qualitative variables relevant to a regression . If group membership is arbitrarily assigned the value of 1 , then all others would get the value 0 . Then the intercept ( the value of the dependent variable if all other explanatory variables hypothetically took on the value zero ) would be the constant term for non-members but would be the constant term plus the coefficient of the membership dummy in the case of group members . </P>
<P> Dummy variables are `` proxy '' variables or numeric stand - ins for qualitative facts in a regression model . In regression analysis , the dependent variables may be influenced not only by quantitative variables ( income , output , prices , etc . ) , but also by qualitative variables ( gender , religion , geographic region , etc . ) . A dummy independent variable ( also called a dummy explanatory variable ) which for some observation has a value of 0 will cause that variable 's coefficient to have no role in influencing the dependent variable , while when the dummy takes on a value 1 its coefficient acts to alter the intercept . For example , suppose membership in a group is one of the qualitative variables relevant to a regression . If group membership is arbitrarily assigned the value of 1 , then all others would get the value 0 . Then the intercept ( the value of the dependent variable if all other explanatory variables hypothetically took on the value zero ) would be the constant term for non-members but would be the constant term plus the coefficient of the membership dummy in the case of group members . </P>
when do we use dummy variables in regression
when do we use dummy variables in regression
qualitative facts
qualitative facts