Hello to everybody!
I have a simple question to pose. I am running a probit model and among other independent variables I use education and health. Education has three categories (low,middle,high) and so does health (bad, fair, good). The omitted categories are low education and bad health. In order to create interactive dummy variables which categories should I include? If I use middle*fair, middle*good, high*fair and high*good, would that be correct? and for example, middle*fair variable to what is it being compared to?
Thanks in advance and have a Happy New Year!
Dimitris!
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