This document describes using dummy predictor variables in multiple regression analysis. It provides an example using hypothetical data on faculty salaries. Key points:
- Dummy variables allow inclusion of categorical predictors like gender or political party in regression by coding them numerically.
- For k categories, k-1 dummy variables are needed. This example uses gender (coded 0,1) and college (coded 1,2,3) as predictors.
- Regression and ANOVA provide equivalent information about differences in mean salaries for gender and across colleges. Dummy variable regression tests are equivalent to ANOVA comparisons.
- The document screens the salary data for violations of regression assumptions like normality before running analyses.