Index > Decisions > 2021-04-13: Building Models

2021-04-13: Building Models

Assignment 5 has been pushed back to the 15th.

Use one less indicator variable than you have groups. If there are two groups - like foreign and domestic cars - you can use at most one indicator variable.

“Best Practice” is to chose one group to be the “control” group, and leave out the indicator variable for that group. In this way, the indicators contribute to how different an item is from the “standard”.

Model Building

You must decide which variables to add to the model and which ones to remove.

This process can be automated - but not by trying every combination. Either:

• Start with nothing, and add significant variables
• Start with everything, and remove insignificant variables

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Index > Decisions > 2021-04-13: Building Models