Definition:Dummy Variable
Definition
A dummy variable is a quantity written in a mathematical expression in the form of a variable, even though it does in fact represent a constant.
It is usual for a dummy variable to take on the value either $0$ or $1$.
Examples
Regression Equation
Consider the regression equation with the two explanatory variables $x_1$ and $x_2$:
- $y = \beta_0 + \beta_1 x_1 + \beta_2 x_2$
It is sometimes more convenient to write it as:
- $y = \beta_0 x_0 + \beta_1 x_1 + \beta_2 x_2$
where in this context $x_0$ is a dummy variable which always takes the value $1$.
Hence, if we also want to consider the regression model where $\beta_0 = 0$, this can be accommodated by setting the dummy variable $x_0$ equal to $0$.
Also defined as
It is often the case that the term dummy variable is used to apply to what on $\mathsf{Pr} \infty \mathsf{fWiki}$ is called a bound variable.
This usage, while common, is deprecated on $\mathsf{Pr} \infty \mathsf{fWiki}$ to reduce the chance of ambiguity.
Also see
- Results about dummy variables can be found here.
Sources
- 1998: David Nelson: The Penguin Dictionary of Mathematics (2nd ed.) ... (previous) ... (next): dummy variable
- 2008: David Nelson: The Penguin Dictionary of Mathematics (4th ed.) ... (previous) ... (next): dummy variable