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Make use of dummy variable in the regression analysis

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First, explain in your own words (no direct quotes, please) what a dummy variable is and its purpose in regression analysis. Secondly, provide an example of where you might use a dummy variable from your own professional experience. Thirdly, briefly describe how you would implement a dummy variable in a data table you intend to apply regression analysis to. And, finally, provide a short discussion about the course project data set: where would you envision using a dummy variable in this data set?

Note that most of the answers to the questions are relative short and simple. So, be responsive and complete, but as succinct as possible. The idea is for you to explain the essential information regarding the topic of interactions.

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In regression analysis, dummy variable is the one who has only 2 values: 0 or 1. The reason why we include the dummy variable in the model is that we may have categorial variables. The categorial variables can not be measured in numbers. For example, the variable whose value is either yes or no is a ...

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The solution gives detaield discussion on the use of dummy variable in the regression analysis.