How many dummy variables will you need to include if you wish to develop a regression model in which the high school class standing is a qualitative variable with four possible levels of response?
A) 8
B) 5
C) 4
D) 3

Question

Quizplus · Accepted Answer

To include a qualitative variable with four possible levels of response, we need to use (n-1) dummy variables, where n is the number of levels. Therefore, we would need to use (4-1) = 3 dummy variables.

How Many Dummy Variables Will You Need to Include If