What are Dummy Variables?

Similarly in case of the treatment group the variable Z came up with the value 1 with the possibilities of errors are considered to be zero then the equation is                           

y_t =B_o+B₁

Now the solution for the B1 is examined which is the difference between the two groups so by subtracting the values for both the groups the concluded equation is
                                           

y_t -y_c = B₀

So the multiple variables are stated in the single equation with the use of dummy variables. Almost in all the cases of the dummy variables, they are used to represent different sub group equations. They are used as stated in the following two cases. [linkunit]

• Finding and evaluating the difference of values of the multiple groups by stating their values in the different equations.

• Formation of the separate equations for an each individual group by replacing the dummy variables.

References

• Keisler, H.J. and Robbin, J., (1996), Mathematical Logic and Computability.
• Trochim, W.M.K (2006), Dummy Variables. “Research Methods the knowledge base”.