Topic 13: Dummy Variables Flashcards Preview

ECON2271 Business Econometrics > Topic 13: Dummy Variables > Flashcards

Flashcards in Topic 13: Dummy Variables Deck (3)
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1

How many dummy variables should be included given a catagory variable with 5 possible values 

4 dummy variables!

 

2

Can the regressant be a dummy variable?

No.

The error is binomial distributed, so normality assumption is broken

3

How can we deal with dummy regressants?

Not OLS, Logit, Probit or Tobit model