Suppose that in a regression analysis, the explanatory variable X 1 represents t

Question

Suppose that in a regression analysis, the explanatory variable X1 represents temperature, and the explanatory variable X2 represents whether or not an individual lives in a warm or cool climate. Which statement is the most accurate given this information?

Only X1 should be modeled by a dummy variable.

Only X2 should be modeled by a dummy variable.

Both variables represent temperature, and thus must be modeled as continuous variables.

Because both variables represent temperature, they should be modeled by an interaction term.

Both variables represent must be modeled as dummy variables.

Only X1 should be modeled by a dummy variable.

Only X2 should be modeled by a dummy variable.

Both variables represent temperature, and thus must be modeled as continuous variables.

Because both variables represent temperature, they should be modeled by an interaction term.

Both variables represent must be modeled as dummy variables.

Explanation / Answer

B. X2 is a categorical variable here and not continuous. Thus, it should be modeled by a dummy variable

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