Suppose you are interested in using regression analysis to estimate an MLB player's salary using the following independent variables: the player's position in the field, the player's career strikeouts, if the player is a pitcher, the player has played in the Olympics, the player's nationality, and the player is an All-Star. Which of the following independent variables are indicator (dummy) variables? Select all that apply.
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the player's position in the field
the player's career strikeouts
if the player is a pitcher
the player has played in the Olympics
the player's nationality
the player is an All-Star
None of these
Answer:
if the player is a pitcher
the player has played in the Olympics
the player is an All-Star
Explanation:
Aa dummy variable or an indicator variable is a variable which attends to answer the question in yes or no, that is, which takes the value 1 for success and 0 for failure.
Here if the player is a picture can have to possible answers yes or no which takes value 1 for yes and 0 for no
Again the variable the player has played in Olympics can have two possible answers which is yes or no which takes the value 1 years and 0 for no.
Similarly the variable the player is an all star can have two possible answers Yes - the player is an all star or No - the player is not an all star, which takes the value 1 if the player is an all star and 0 if the player is not an all star.
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