|From||Richard Williams <Richard.A.Williams.email@example.com>|
|Subject||Re: st: Statistical/Stata question|
|Date||Tue, 17 Feb 2004 22:03:59 -0500|
It isn't silly at all.Agreed. To offer some substantive examples: When you have a categorical variable, you may not necessarily want to create and use all possible dummies. The Ns for some categories may be very small, or, for the purposes of your analysis, the differences between groups may be small or nonexistent.
In effect, you are forcing the first two categories (1 and 2) to have exactly the same odds (probability) for the event. In other words, you are constraining the odds ratio for category2 vs. category1 to be exactly equal to 1. As a consequence, the comparison of category3 to category1 has the same odds ratio as the comparison of category3 to category2 (and similarly for category4). For the purposes of the model, there are only 3 categories: a combined 1/2 category, category3 and category4.