Daly, A orcid.org/0000-0001-5319-2745, Dekker, T orcid.org/0000-0003-2313-8419 and Hess, S orcid.org/0000-0002-3650-2518 (2016) Dummy coding vs effects coding for categorical variables: clarifications and extensions. Journal of Choice Modelling, 21. pp. 36-41. ISSN 1755-5345
Abstract
This note revisits the issue of the specification of categorical variables in choice models, in the context of ongoing discussions that one particular normalisation, namely effects coding, is superior to another, namely dummy coding. For an overview of the issue, the reader is referred to Hensher et al. (2015, see pp. 60-69) or Bech and Gyrd-Hansen (2005). We highlight the theoretical equivalence between the dummy and effects coding and show how parameter values from a model based on one normalisation can be transformed (after estimation) to those from a model with a different normalisation. We also highlight issues with the interpretation of effects coding, and put forward a more well-defined version of effects coding.
Metadata
Item Type: | Article |
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Authors/Creators: | |
Copyright, Publisher and Additional Information: | © 2016 Elsevier Ltd. All rights reserved. This is an author produced version of a paper published in Journal of Choice Modelling. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | dummy coding; effects coding; discrete choice; categorical variables |
Dates: |
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Institution: | The University of Leeds |
Funding Information: | Funder Grant number EU - European Union 615596 |
Depositing User: | Symplectic Publications |
Date Deposited: | 21 Sep 2016 10:49 |
Last Modified: | 11 Jan 2023 13:07 |
Published Version: | https://doi.org/10.1016/j.jocm.2016.09.005 |
Status: | Published |
Publisher: | Elsevier |
Identification Number: | 10.1016/j.jocm.2016.09.005 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:104911 |