The dummy variable trap is an example of
A)imperfect multicollinearity
B)something that is of theoretical interest only
C)perfect multicollinearity
D)something that does not happen to university or college students

Question

Quizplus · Accepted Answer

The dummy variable trap arises when we include a dummy variable for each category of a categorical variable, and one of the categories can be perfectly predicted from the others. This leads to a situation of perfect multicollinearity and can cause problems in regression analysis.

The Dummy Variable Trap Is an Example of