Binary variables

One of the types of variables that are measures or used in a marketing research study. These are also known as dummy, dichotomous, instrumental, categorical, or qualitative variables. These variables may take on only two values, such as 0 or 1. The general rule is that to specify a binary variable with K categories, k-1 dummy variables are needed. The reason for having K - 1, rather than K, dummy variables is that only K – 1, categories are independent. Given the sample data information about the Kth category can be derived from information about the other K – 1 category. For example, sex, a variable having two categories, only one dummy variable is needed. Information on the number or percentage of males in the sample can be derived from the number or percentage of females.