If a variable has 'm' categories, we can run the regression using :
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2 marksEconometricsDummy variables and functional formsDummy variables and the dummy variable trapModerateabout 1 min
UGC-NET 2024 Question 79: Dummy variables and functional forms
Answer and worked solution
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Dummy variables and functional forms has come up 20 times in 6 exams since 2011.
What this question tests
This question is on Dummy variables and the dummy variable trap, part of Dummy variables and functional forms in Econometrics.
Using 0-1 variables for categories, how to read their coefficients, and the trap of too many.
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