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MULTIPLE REGRESSION WITH CATEGORICAL DATA

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ISexMerit PayiSexMerit OF POLITICAL SCIENCEANDINTERNATIONAL RELATIONSPosc/Uapp 816MULTIPLE REGRESSION WITH CATEGORICAL DATA REGRESSION with CATEGORICAL : Agresti and Finlay Statistical Methods in the Social Sciences, 3rdedition, Chapter 12, pages 449 to INDEPENDENT : what does sex discrimination in employment mean and how can it bemeasured? answer these questions consider these artificial data pertaining to employmentrecords of a sample of employees of Ace : here the dependent variable, Y, is merit pay increase measured in percentand the "independent" variable is sex which is quite obviously a nominal orcategorical goal is to use CATEGORICAL variables to explain variation in Y, a quantitativedependent need to convert the CATEGORICAL variable gender into a form that makessense to REGRESSION way to represent a CATEGORICAL variable is to code the categories 0 and 1 asfollows:Posc/Uapp 816Class 14 MULTIPLE REGRESSION With CATEGORICAL DataPage 2let X = 1 if sex is "male"0 otherwiseiSexMerit PayiSex Merit Pay (c1) (c2) (c3) (c1) (c2) (c3) : Bob is scored "1" because he is male.

I. AGENDA: A. Multiple regression with categorical variables 1. Coding schemes 2. Interpreting coefficients 3. Interaction ... Even a cursory glance at the data reveal that men get higher increases than women. But the real question is why ? 2. Notice for example that men differ from women on other factors such as

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