If a categorical independent variable contains four categories,then ___________ dummy variable(s)will be needed to uniquely represent these categories.
A) 1
B) 2
C) 3
D) 4

Question

Quizplus · Accepted Answer

For a categorical independent variable with four categories, we need to create three dummy variables to represent each category. This is because we need k-1 dummy variables to represent a categorical variable with k categories. In this case, k = 4, so we need 4-1 = 3 dummy variables. Each dummy variable will represent a specific category of the categorical variable, and the fourth category will be the reference category.

If a Categorical Independent Variable Contains Four Categories,then ___________ Dummy