Question

in linear regression what does reference class mean and how do you determine it with a model of just first order terms?

Answer 1

In Linear Regression, reference class is the class by which we compare other predictors (variables) .

We can say that, it's a benchmark (Or threshold) set for testing other variables.

A ‘reference’ category is so named and identified as a category of comparison for the other categories. In other words, the other categories are compared to the reference.

Strategies for Choosing the Reference Category in Dummy Coding

Strategy 1: Use the normative category. In many cases, the most logical or important comparisons are to the most normative group. ...

Strategy 2: Use the largest category. ...

Strategy 3: Use the category whose mean is in the middle, or conversely, at one of the ends.

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