Applications of Dummy Variable s Techniques in Multiple Regression

Abstract

This thesis was discused the way of estimating the multiple linear regression models which include the indpendent qualitative variables by using the dummy variable or indicator of (0,1) method, th idea of this method based on factors (variables) and levels . The dummy variable will be in binary (0,1) way to represent the independent qulitative variable . Any inpendent qulitative variable with j levels can be represented as j-1 dummy variables. This study targeted Defining and analyizing qulitative data by using the dummy variables . Estimating multiple linear regression models that include the dummy variables. Interpretring the parameters of regression models that include the dummy variables Some results of this reseach: The regression coefficinets for the dummy variables represent the deviations from comparision category (the base of the compersion) on the critrition variables. The deviations represent the difference betweens means for each category responses which is defined by dummy variable and the comparsion category. The definitions of the dummy variables coding by scale numbers and (0,1) will give the same results in the estimation , but the only differences will be in the interpretation of the dummy variables parameters , the definition with (0,1) iseasier and better.