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Suppose I have a categorical variable consisting of four levels: a, b, c, and d. When these levels are mutual exclusive, I would use dummy coding - so three dummies with for example level a as reference.

Is this dummy coding scheme still valid if two or more categories can overlap for a certain observation? For example, a person who has both level a and level c. Or does this mean I need to make four dummies instead?

Amonet
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