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5 votes
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About dummy variable trap

It is. There are $k$ companies, if you use $k$ dummy variables it’d suffer from perfect multicollinearity, you need to use $k-1$ variables instead.
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4 votes

Is it acceptable to create a dummy variable out of a quantitative variable?

You can. But this transformation will just scale down your coefficient. The z and p-value should stay the same.
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0 votes

Why dummy variables rather than one "factor" variable in modelling?

It is based on your research question. For the example of elementary school to high school. Let's say that you're trying to measure the Impact of educational level(niveau d'éducation) on the overall ...
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5 votes

Discovering groupings of descriptive tags from media

If you are after visualizing the relationships, then you might use some network visualization algorithms. I did this once with the tags of cross validated (Disclaimer: I am not an expert at this). I ...
11 votes
Accepted

Discovering groupings of descriptive tags from media

You can use the market basket analysis, a simple and popular data mining technique that does exactly what you described: groups co-occurring items together. For a more sophisticated solution, you can ...
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0 votes

How to fit a multiple membership model when the factor is nested?

lmerMultiMember is an R package that implements multiple membership models in lme4. To use nested multiple membership factors in ...
2 votes

How do I interpret a regression model when there are impossible additive effects?

Turning my comment into an answer: If season is just defined in terms of month and consists of the same set of ...
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1 vote
Accepted

Dummy variable trap in OLS with multiple indicator variables

For part 1, yes you should exclude one of the dummies per group. To be more specific, for every set of dummy variables that split the data into mutually exclusive and collectively exhaustive ...
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1 vote

Which groups are reference groups in a regression model with interaction?

note: I'm a VERY beginner, but I'll try to give you a hint. (if I'm wrong, please any moderator feel free to exclude this comment). Whenever I have a complex model, I try to do the artimetic by hand, ...
3 votes
Accepted

Which groups are reference groups in a regression model with interaction?

Every categorical variable has a reference group. Speciessetosa is the reference group for Species and ...
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3 votes

Examples showing the difference between dummy variables and binary variables?

Your definitions mostly are fine. I would just add that "don’t have any relationship with each other" may not be precisely true depending on what you mean by "relationship". If I ...
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0 votes

Random Forest for predicting dummie variable

Are you sure that you are not incorrectly using the regression variant of random forest, instead of the classification one? It is also possible that your software returns soft classifications, the ...
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