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Indicator or dummy variables are variables that take only two values —0 and 1. Normally 1 represents the presence of some attribute and 0 its absence. We have already encountered such variables in Example 2.2, p. 31. They have a wide range of uses which will be discussed in this chapter. We shall mainly be concerned with using them as independent variables. In general, their use as dependent variables in least squares analysis is not recommended. Nonetheless, we shall consider the topic further in the final section of this chapter.
KeywordsIndicator Variable Ring Gear Interpersonal Attraction Room Odor Room Problem
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