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 ...

Indeed, many commercially-available regression-analysis packages contain specific features to facilitate the construction of new variables (i.e., new columns of data) from products of existing ...

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 ...

Robert Halvorsen, Raymond Palmquist, The Interpretation of Dummy Variables in Semilogarithmic Equations, The American Economic Review, Vol. 70, No. 3 (Jun., 1980), pp ...