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Chapter 17

Transformations of Categorical Variables

17.1 Introduction

17.2 General Considerations for Categorical Variables

17.3 Derived Variables

17.4 Combining Categories

17.5 Dummy Coding of Categorical Variables

17.6 Multidimensional Categorical Variables

17.7 Lookup Tables and External Data

17.1  Introduction

In this chapter we will deal with transformations of categorical variables. With categorical variables we mean variables such as binary, nominal, or ordinal variables. These variables are not used in calculations—instead they define categories.

In Chapter 16 – Transformations of Interval-Scaled Variables, we saw a lot of transformations of interval data. Most of these transformations were based on calculations. With categorical ...

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