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**"Understanding Dummy Variables in Economics: Applications and Analysis"**

Discover the use of dummy variables as zero-one or Bernoulli variables for handling yes-no or possess-don't possess situations in economics. Learn how to incorporate dummy variables as explanatory or intercept shifters.

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**"Understanding Dummy Variables in Economics: Applications and Analysis"**

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  1. Economics 310 Lecture 10 Dummy Variables

  2. Dummy Variables • Zero-one variables • Bernoulli Variables • Qualitative variables • Used to handle yes-no, possess-don’t possess try situations

  3. Dummy Variable as only Explanatory Variable

  4. Dummy Variable as only Explanatory Variable Y 1 1+2 D=0 D=1

  5. Dummy as intercept shifter

  6. Y X Dummy as intercept shifter

  7. Qualitative variable with more than 2 classes

  8. Qualitative variable with more than 2 classes Y X

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