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Up until now, we have seen, only quantitative variables in regression models. What happens if qualitative variable is present? For example, if ‘gender’ is one of the independent variable in regression model, what number will you give to ‘gender’, dont know! ‘Gender’ is a qualitative variable. Either a person is male or female, ‘a binary choice’. In this case, say a ‘quality’ is that a person is male, so, if a person is male, then you put ‘1’ otherwise 0.  Hence, in the column of ‘gender’ you will have series of 0’s and 1’s. Now you will run the regression. Continue reading →