Consider a linear regression situation with a quantitative response variable Y, a quantitative explanatory variable X, and one categorical explanatory variable with 3 levels. Three indicator variables A1, A2 and A3 are defined, with Ak = 1 if the individual is from level k, and O otherwise (for k=1,2,3). To allow different slopes (for the relationship between X and Y) for each level of the categorical variable, which of the following terms need to be included in the model in addition to Bo + B1X + 8? O A1, A2, and A3. O Aj and A2, but not A3. O A X, A2X, and A3X. O AjX and A2 X, but not A3X.

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09-12-2022
Mathematics

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Consider a linear regression situation with a quantitative response variable Y, a quantitative explanatory variable X, and one categorical explanatory variable with 3 levels. Three indicator variables A1, A2 and A3 are defined, with Ak = 1 if the individual is from level k, and O otherwise (for k=1,2,3). To allow different slopes (for the relationship between X and Y) for each level of the categorical variable, which of the following terms need to be included in the model in addition to Bo + B1X + 8? O A1, A2, and A3. O Aj and A2, but not A3. O A X, A2X, and A3X. O AjX and A2 X, but not A3X.

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durbansa43 durbansa43 · Answer 1 · 2022-12-18T15:15:14+01:00

Include all three indicator variables (A1, A2, and A3) in the model

To allow different slopes in the relationship between X and Y for each level of the categorical variable, the model should include terms A1X and A2X in A1 and A2 respectively. For example, the model can be expressed as:

Bo + B1X + B2A1X + B3A2X + B4A3

where B2 and B3 represent the slope of the relationship between X and Y for people at levels 1 and 2 of the categorical variable, respectively. represent. The value of X remains constant.

Include all three indicator variables (A1, A2, and A3) in the model. This allows to compare the effect of a given level of a categorical variable on the response variable while keeping the value of X constant. For example, if you include only A1 and A2 in your model, you cannot compare the effects of level 3 of the categorical variables on the response.

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