An evaluation of the application of dummy variables in regression analysis

Description

Abstract

An evaluation of the application of dummy variables in regression analysis. Over the years, several researchers have developed an approach of including these categorical variables called the dummy variable. Thus, this study will attempt the application of dummy variables in regression model analysis in the presence of qualitative variables in a regression model. More specifically, the study developed a simple regression model that includes a dummy independent variable that models the cost price of repairing phones in a phone maintenance shop. The study utilized secondary data from the maintenance office and the model fitted was evaluated for adequacy where the p-value is less than 0.05, indicating the significance of both the model and the independent variable. More specifically the result revealed that the cost of repairing a mobile phone with screen-related issues is less in cost compared with panel repair issues. More interestingly, the application of the dummy variable pointed out that the cost will increase by about N10,000 when the repair is panel related..