On a survey there is a question that asks whether someone lives in a house, apartment, or condominium. These three responses could be coded in a dummy variable using value 0, 1, and 2.

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Dummy variables are typically binary, meaning each one represents a yes/no (1/0) situation for a specific category. To represent three categories (house, apartment, condominium), you would need at least two dummy variables (e.g., 00, 01, 10) rather than coding them as 0, 1, and 2 in a single variable.

On a Survey There Is a Question That Asks Whether