Lesson 11: Binary Variables

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February 28, 2017 at 10:00 am  •  Posted in s17-busad360 by  •  0 Comments

Tue, Feb 28

Review:

Presentation:

  • Binary variables
    • also known as “Dummy” variables
    • also known as “Indicator” variables
    • value must be either “1” or “0”
  • Demonstration with Real Estate Sample data 
    • create binary variable in separate column with only 1 or 0
    • run regression with the new binary column
    • the coefficient multiplies by 1 if the condition is present
    • the coefficient multiplies by 0 if the condition is not present

Activity:

  • Use the East Pueblo RE Sales 2014-2016 (Sheets)
    • Build upon your multiple regression model from last week
    • Add a Binary variable using the “Sub Area” variable

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