Unformatted text preview: we MUST have numerical variables in regression analysis. Therefore, we code 3 dummy variables to represent the 4 levels of REGION. See sample data below. Store Region South East West Years built Sales ($millions) 1 North 18 15 2 South 1 13 22 3 East 1 2 8 4 West 1 25 35 I arbitrarily selected North to not be a variable. Otherwise, I "could have" created the dummies to be North, East, and West, or any other combination. Also, the above is just a sample problem with a few observations so you can get a feel for how such data must be entered. If you try to run this problem in Excel you will get an error due to small sample size given we have so many independent variables. Dr. J....
View
Full Document
 Spring '08
 Nabavi
 Regression Analysis, dummy variables, Dr. J

Click to edit the document details