Classification variables can be represented in the reference parameterization in high-performance statistical procedures. Only one parameterization applies to the variables in the CLASS statement.
To understand the reference representation, consider the classification variable A that has four values, 1, 2, 5, and 7. The reference parameterization generates three columns (one less than the number of
variable levels). The columns indicate group membership of the nonreference levels. For the reference level, the three dummy
variables have a value of 0. If the reference level is 7 (REF=’7’), the design columns for variable A are as shown in Table 4.14.
Table 4.14: Reference Coding
|
Design Matrix |
|||
|---|---|---|---|
|
A |
A1 |
A2 |
A5 |
|
1 |
1 |
0 |
0 |
|
2 |
0 |
1 |
0 |
|
5 |
0 |
0 |
1 |
|
7 |
0 |
0 |
0 |
Parameter estimates of CLASS main effects that use the reference coding scheme estimate the difference in the effect of each nonreference level compared to the effect of the reference level.