Abstract
In this chapter, 0-1 indicator or “dummy” variables are used to incorporate segment differences, shocks, or structural shifts into models. In cross sectional data, indicators can be used to incorporate the unique responses of particular groups or segments. In time series data, indicators can be used to account for external shocks or structural shifts. Indicators also offer one option to account for seasonality or cyclicality in time series.
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This example is a hypothetical scenario based on actual data
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This example is a hypothetical scenario based on actual data
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Harvard Business School case 9602096
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Harvard Business School case 9602097
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Fraser, C. (2013). Indicator Variables. In: Business Statistics for Competitive Advantage with Excel 2013. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-7381-7_12
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DOI: https://doi.org/10.1007/978-1-4614-7381-7_12
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