If a qualitative variable has three categories, how many dummy variables are needed?
A)0
B)1
C)2
D)3
E)4

Question

Quizplus · Accepted Answer

For a qualitative variable with three categories, two dummy variables are needed. This is because two variables can adequately represent the three categories -- for example, if the categories are "red," "green," and "blue," two dummy variables could be used to represent "red" vs "not red," and "green" vs "not green" (which would include "blue").

If a Qualitative Variable Has Three Categories, How Many Dummy