Dummy Variable

A dummy, or indicator, variable is any variable in a regression equation that takes on a finite number of values so that different categories of a nominal variable can be identified.

The term dummy simply relates to the fact that the values taken on by such variables (usually values such as 0 and 1) indicate no meaningful measurement but rather the categories of interest.

For example,

and

The variable X1 indicates a nominal variable describing ‘treatment group’ (either Treatment A or not Treatment A) and X2 indicates a nominal variable describing ‘sex.’

The following simple rule always is applied to avoid collinearity and the imposition of a monotonic doseresponse in the regression model: For an exposure with K distinct levels, one level is first chosen as the baseline or reference ...