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I have 8 independent variables which may be nominal or ordinal, and I want to see how each of them affect a numeric dependent variable $Y$, so that the effect of $X_{1}$ is controlled by the rest of variables $X_{2}$ through $X_{8}$.

How can I do this?

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1 Answer 1

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You could create a dummy variable (https://en.wikipedia.org/wiki/Dummy_variable_(statistics) ) for each category.

For example, if you have variable $X_1$ that can attain three values, say, $X_1 = 1$ or $X_1 = 2$ or $X_1=3$. Then create 3 new dummy variables, $d_1, d_2, d_3$, such that $$d_i = \begin{cases} 1 & \text{if } \ X_1 = i \\ 0 & \text{otherwise} \end{cases}$$ and regress $$ Y = \delta_1 d_1 + \delta_2 d_1 + \delta_3 d_1 + \epsilon, $$ in order to estimate $\delta_i$. These parameters are equal to average $Y$ in the group of observations with $X_1 = i$. If there are other regressors, then $\delta_i$ correspond to a conditional mean, conditional on the impact of the other variables on the right-hand side.

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