In multiple regression, a dummy variable can be included in a multiple regression model as
A) an additional quantitative variable.
B) a nominal variable with three or more values.
C) a nominal variable with only two values.
D) a new regression coefficient.

Question

Quizplus · Accepted Answer

A dummy variable is a nominal variable with two values, usually coded as 0 and 1. In multiple regression, a dummy variable can be included to represent a categorical variable with two groups. The variable takes the value of 0 for one group and 1 for the other group. Therefore, the correct choice is C, a nominal variable with only two values. A is incorrect because a dummy variable is not a quantitative variable. B is incorrect because a categorical variable with three or more groups would require multiple dummy variables (one for each group). D is incorrect because a dummy variable does not add a new regression coefficient, but it changes the interpretation of the existing coefficients in the model.

In Multiple Regression, a Dummy Variable Can Be Included in a Multiple