A natural question: When the qualitative variable takes k categorical values, why don't we simply encode it with k "yes/no" variables? Conceptually, this would work. Practically, it fails inside the ...

The other regression statistic that becomes difficult to interpret after this one-into-many process is the significance level. If some of the dummy variables have large significance levels, and others ...

AirEntrain is a categorical (yes/no) variable and cannot be used in regression without transforming it to a numerical {0,1} dummy/indicator variable. We can use our recoding skills from Lesson 5 to do ...

Conditions are established conditions under which it is possible to identify the average effect of the dummy endogenous regressor in a weakly separable model without relying on parametric functional ...

The practical obstacle relates to the difficulty of computing the MLE of the coefficients of non-linear models with possibly thousands of dummy variable coefficients. In fact, in many models of ...