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Re: st: how to deal with categories?

From   Maarten buis <>
Subject   Re: st: how to deal with categories?
Date   Tue, 3 Jun 2008 13:58:37 +0100 (BST)

These are very general questions, so you get a very general advise: 
1) In general I would be hesitant to turn a continuous variable into a
categorical variable. 
2) Look at your residuals.

-- Maarten

--- Andrea Bennett <> wrote:

> Dear all,
> Right now I am wondering what is the better way to deal with  
> categorical information.
> 1.
> What is about the best way to implement income groups into a  
> regression? E.g. as income has (usually) no upper limits, I tend to  
> generate an interaction term (dummy==1) if the individual is in the  
> highest income category (0 if else). Further, am I right in the  
> assumption that building categories is usually not sensible when the 
> number of observations is high? One issue I face is that very young  
> adults and very old adults are under-represented in the dataset  
> (meaning, not that many unique observations for these groups, sample 
> itself is good). Is there a rule of thumb what would be better,  
> building categories for all age-classes (increasing observations in  
> young/old group) or do not build classes at all (having more detailed
> info)? It's clearly a trade-off but maybe there's some advice. I tend
> not to use categories here, also because age-squared might be  
> important to have at hand, later.
> 2.
> The "xi" command can help to make life less messy (in large data
> sets,  
> I think). But it seems to kill all my value labels in these  
> categorical groups! I could not find any option to tell "xi" to use  
> the already defined value labels. Is there a workaround at hand so  
> that the regression table will instead use the values defined (e.g.  
> for sex; 0==male, 1==female) as new variable names?
> Many thanks for all your inputs,
> Andrea 
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Maarten L. Buis
Department of Social Research Methodology
Vrije Universiteit Amsterdam
Boelelaan 1081
1081 HV Amsterdam
The Netherlands

visiting address:
Buitenveldertselaan 3 (Metropolitan), room Z434

+31 20 5986715

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