INTRODUCTION TO ECONOMETRICS II ECO 306 NOUN 91
CONTENTS 2.5.1.0 Introduction
2.5.2.0
Objectives 2.5.3.0 Main Content
2.5.3.1
The Dummy Variable Trap 2.5.3.2 Change of Reference Category
2.5.3.3
Slope Dummy Variables 2.5.4.0 Summary
2.5.5.0
Conclusion 2.5.6.0 Tutor-Marked Assignment
2.5.7.0 References/Further
Reading 2.5.1.0 INTRODUCTION It sometimes happens that some descriptive variables do exist
in our regression equation,and/or the factors that you would like to introduce into a regression model are qualitative (racial, sex or age differences) in nature and therefore not measurable in numerical terms. In such circumstances, dummy variables are utilised.
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