In trying to construct a model to estimate grades on a statistics test,a professor wanted to include,among other factors,whether the person had taken the course previously.To do this,the professor included a dummy variable in her regression model that was equal to 1 if the person had previously taken the course,and 0 otherwise.The interpretation of the coefficient associated with this dummy variable would be the mean amount the repeat students tended to be above or below non-repeaters,with all other factors the same.

Question

Quizplus · Accepted Answer

This is the correct interpretation of the coefficient of a dummy variable in a regression model. It shows the difference in the mean outcome variable between the group represented by the "1" value and the reference group represented by the "0" value, holding all other variables constant. In this case, the coefficient associated with the dummy variable for previous course takers would show the difference in average test score between those who have taken the course before and those who have not, controlling for other factors in the model.

In Trying to Construct a Model to Estimate Grades on a Statistics