I have runa multiple regression analysis and have three explanatory variables (two quantitative and one categorical).
The categorical variable has 4 levels and therefore i have 3 dummy variables in my regression model.
I am wondering whether in the model equation, I am supposed to include a separate term for each dummy variable of the categorical variable, or I'm supposed to simply write out the term for the categorical variable and not include terms for the dummies?
The variables are: Height(Quantitative),Age(Quantitative), Country(Categorical with four levels: England, Wales, Scotland, Ireland)
So is the equation supposed to be:
1) Life Expectancy = b0 + b1*Height + b2*Age + b3*Country
2) Life Expectancy = b0 + b1*Height + b2*Age + b3*Scotland + b4*Wales + b5*Ireland
Note: The reference variable for the dummy variables is England and therefore I did not include it in the second equation as of course the regression model doesn't produce a coefficient for it...