I have to do binary logistic regression with a lot of independent variables. Most of them are binary, but a few of the categorical variables have more than two levels.
What is the best way to deal with such variables?
For example, for a variable with three possible values, I suppose that two dummy variables have to be created. Then, in a step-wise regression procedure, it is better to test both of the dummy variables at the same time, or to test them separately?
I will use SPSS, but I do not remember it very well, so: how does SPSS deal with this situation?
Moreover, for an ordinal categorical variable, it is a good thing to use dummy variables which recreate the ordinal scale? (For example, using three dummy variables for a 4-state ordinal variable, put
0-0-0 for level $1$,
1-0-0 for level $2$,
1-1-0 for level $3$ and
1-1-1 for level $4$, instead of
0-0-1 for the 4 levels.)