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Allisa
2 months ago
12

An analyst wants to include the level of education to a regression model. The level of education has 4 possible values: HS, BS,

MS, and PhD. How many dummy variables must the analyst add to the regression model to account for this variable
Mathematics
1 answer:
PIT_PIT [12.4K]2 months ago
6 0

Response:

Three.

Detailed explanation:

An analyst aims to integrate Level of Education into a regression model.

This variable has four categories: HS, BS, MS, PHD.

The number of dummy variables needed is:

Given 4 categories, (4 - 1 = 3) dummy variables will suffice for the model.

If M represents a dummy variable, where 1 signifies the presence of a specific education level and 0 its absence;

M1 = 1 for HS, 0 otherwise

M2 = 1 for BS, 0 otherwise

M3 = 1 for MS, 0 otherwise

When M1, M2, and M3 are all 0, the value of PHD is implied.

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Answer:

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