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.
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
- Dummy variable trap
- Duplicate removal
- Embedded method
- Entity embedding
- Equal-frequency binning
- Equal-width binning
- Feature crossing
- Feature engineering
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.