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Indicator Variables

  • Cynthia Fraser
Chapter

Abstract

In this chapter, 0-1 indicator or “dummy” variables are used to incorporate segment differences, shocks, or structural shifts into regression models. With cross sectional data, indicators can be used to incorporate the unique responses of particular groups or segments. With time series data, indicators can be used to account for external shocks or structural shifts. Indicators also offer one option to account for seasonality or cyclicality in time series.

Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  • Cynthia Fraser
    • 1
  1. 1.McIntire School of CommerceUniversity of VirginiaCharlottesvilleUSA

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