Which best describes how to prepare a categorical variable for use in a regressi

Question

Which best describes how to prepare a categorical variable for use in a regression model using Excel?

The variable will need to be converted to separate dichotomous “dummy” variables for each of the four intervention groups. All of these “dummy” variables then get entered into the model.

The variable will need to be converted to separate dichotomous “dummy” variables for each of the four intervention groups. One of the “dummy” variables will then serve as a reference group for the other three “dummy” variables that get entered into the model.

None of the above – it can be used as is since the values are numeric (1-4).

None of the above – categorical variables cannot be used in regression models.

The variable will need to be converted to separate dichotomous “dummy” variables for each of the four intervention groups. All of these “dummy” variables then get entered into the model.

The variable will need to be converted to separate dichotomous “dummy” variables for each of the four intervention groups. One of the “dummy” variables will then serve as a reference group for the other three “dummy” variables that get entered into the model.

None of the above – it can be used as is since the values are numeric (1-4).

None of the above – categorical variables cannot be used in regression models.

Explanation / Answer

Option B is the correct answer in this case.

Of all the categories in the variable, we set one category as the base category and then create other dichotomous dummy variables for the remaining categories.

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