I'm confused about which predictor should have the "0" and which should have the "1" when using dummy codes for regression. For example:
Y: time spent at current job
X: type of assessment --> interview (I), competency exam (C), written test (W)
Question: a researcher is interested in comparing differences in time spent at a current job (Y) between those given an interview (X1) and those given competency exams (X2).
I designed my table like this:
- New variable 1: I --> +1, C --> 0, W --> 0 (Because I am comparing competency individually to interview)
- New variable 2: I --> 0, C --> 0, W --> +1 (Because I am comparing competency individually to written)
However, these new variables are not orthogonal. Is that OK? (I'm not sure I understand what the point of variables being orthogonal is. I'm so lostlost. Also, when do I use dummy coding instead of contrast coding? Is there a hard and fast rule for when to default to either?