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What is dummy predictor variable?

In statistics some variables are used to shift the outcome of the value of regression analysis. These variables take use the value zero or one to change the outcome. Moreover, the values zero indicate the absence and one represents presence of some categorical impact to change the result. Just like a computer programming it accepts the value of zero and one.

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What are the different categories?

These are –

  • Dummy independent variables – When take the value 0
  • Dummy dependent variable – When takes the value 1

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What are the various fields where Dummy predictors are used?

These are used in –

  • Time series analysis.
  • Qualitative data application.
  • Seasonal Analysis.
  • Economic Forecasting.
  • Credit scoring.
  • Resposnse modeling.
  • Bio medical.

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