Statistical analysis in business, political science, sociology and other fields often includes variables in which the numbers represent qualitative categories, such as gender, ethnicity or political affiliation. Including these variables in an analytical model requires special steps to ensure the results can be interpreted properly. These steps involve coding a categorical variable into multiple dichotomous variables, in which variables take the value of "1" or zero. This process is known as "dummy coding." SPSS, a popular statistical software package among social science researchers, makes dummy coding a simple process.
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Select the categorical variable you want to dummy code. Note the number of categories, remembering that dummy coding transforms a variable with "n" categories into "n-1" categories. For example, a categorical variable on political affiliation with three categories -- Democrat, Republican and Independent -- would be dummy coded into two dichotomous variables, such as Democrat and Republican. A person who identifies as one of these would be coded a "1" in the data set. A person with a zero in these categories would be counted as independent.
Click the "Transform" menu at the top of the SPSS data sheet. Select "Recode Into Different Variable," because you will transform the categorical variable into one or more dichotomous or dummy variables. This opens a window that displays the variables in your data set. Select the variable you want to recode, then click the arrow, which moves the variable name into the box labelled "Numeric Variable."
Click the "Output Variable" name box and type a name for your new dichotomous variable. Click "Change." Click "Old and New Values," which opens a new display, showing old and new values for the variable you want to transform.
Recode the values of the variable by coding one category as a "1" and the others as zero. Under "Old Value," enter the category value to be recoded. Under "New Value," type a "1," then click "Add." On the "Old Value" side, select the "All Other Values" button and type "0" as the new value. For example, the political affiliation example that codes Democrat as a "1," Republican as a "2" and Independent as a "3" could be recoded into the dichotomous variable Republican, with all "2s" recoded as "1" and other values coded as zero.
Click "Continue" after entering the old and new values for your dummy codes, then click "OK." SPSS will then recode the categorical variable as you have specified.
Repeat the procedure to create additional dichotomous variables.
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