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What is a categorical variable?

In: Math and Arithmetic, Statistics, Bachelor of Business Administration BBA [Edit categories]

Answer:

These are variables that place individuals literally into categories, and cannot be quantified in a meaningful way. Examples would be city of residence, ethnic background, country of birth, hair color, gender, etc. You might encode city of residence as 1, 2, 3, etc, but the alphanumerics here have no ordinal or interval meaning. It is important to plan ahead of time how you are going to use variables; your statistical methods, and their validity, may hinge on these distinctions.

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