# How do I add a dummy variable to a regression model?

A dummy variable is one that takes the value 0 or 1 to indicate the absence or presence of a categorical effect that may be expected to shift the outcome.

In Macrobond, you can create binary series using conditions in the formula language. These formulae need to be applied before the regression analysis.

For example:

quarter()=1|quarter()=3

⇒ Returns 1 if the observation is Q1 or Q3, 0 otherwise

DayOfWeek()=5

⇒ Returns 1 if the observation is a Friday, 0 otherwise

Counter()=EndOfYear()

⇒ Returns 1 if the observation is the last one in a year, 0 otherwise

Cop(usgdp, yearlength())<0

⇒ Returns 1 if the US GDP y/y growth rate is negative, 0 otherwise