Dummy Variable Decisions – Assignment 4

Work with the Excel file of the five crosstabs you created in Assignment 3 (or create crosstabs for different variables if you wish):

1. Compute the ratios of Good Column Percent to Bad Column Percent for each bin for each variable. For example, for Age group 18-20, what is the percent Goods over percent Bads? Similarly, compute for all age groups. Graph the ratios as a scatter plot.
2. Draw lines or shade the groups to show how you would combine bins to break down the variables into dummy variables. Number the dummies, and make sure to indicate which group is to be the neutral (baseline) group.