AI engineering glossary · Feature engineering data prep

What is dummy variable?

Dummy variable (also called Indicator variable): A binary 0/1 column that indicates whether an observation belongs to a category. In regression, one category is often dropped as the baseline so the remaining dummies are not perfectly redundant, which avoids the dummy variable trap.

Level: beginnerTopic: Feature engineering data prep

Dummy variable: an example

For a 3-category plan (basic, plus, pro), two dummies is_plus and is_pro are enough; basic is when both are 0.

Related terms

More Feature engineering data prep terms

Where you learn it

Dummy variable is part of the AI Engineering Program, which teaches it with notes, a hands-on lab and an exam. The first lesson is free.

Before you go

Take the cheat sheet with you

One free PDF: the key AI-engineering terms, formulas and Python idioms. No spam; unsubscribe any time.