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Re: st: Re:using a flag variable for missing values in a regression

From   Maarten Buis <>
Subject   Re: st: Re:using a flag variable for missing values in a regression
Date   Wed, 27 Mar 2013 14:41:04 +0100

On Wed, Mar 27, 2013 at 2:28 PM, Frank D Lopresti wrote:
> I a working with a student who's prof said in a memo "Note: when
> creating new variables, missing values should be coded as some
> arbitrary numerical value (e.g., 0) so that cases aren’t dropped in
> the regression . You can also generate a missing flag for each
> variable, coded 1 for missing and 0 otherwise, and then include the
> flags in tandem with the variables for unbiased estimates."  Is this a
> valid method for dealing with missing data  I've missed?

In general, this is not a valid way of dealing with missing values.
Here is an explanation of what happens when you use this method:

However, there is an exception where this method can be useful, which
is explained here:

Hope this helps,

Maarten L. Buis
Reichpietschufer 50
10785 Berlin

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