Data Analysis with Microsoft Excel: Updated for Office 2007

Chapter 10 Analysis of Variance 407

variable value is 1 if the observation comes from a hotel in San Francisco or

0 if the observation comes from a hotel not in San Francisco.

You’ll use the indicator variables to represent the terms in the effects

model.

To create indicator variables for the hotel data:

1 Click the Hotel worksheet tab (you might have to scroll to see it) to

return to the worksheet containing the hotel data.

2 Click Manipulate Columns from the StatPlus menu and then click

Create Indicator Columns.

3 Click the Categories button, and select City from the list of range

names. Click OK.

4 Click the Output button, click the Cell option button, and select cell

F1. Click OK.

5 Click OK.

Excel generates the four new columns shown in Figure 10-11.

Figure 10-11
Indicator
variables in
columns F:I

The values in column F, labeled I (“NYC”), are equal to 1 if the values in

the row come from a hotel in New York City or 0 if they do not. Similarly,

the values for the next three columns are 1 if the observations come from

Chicago, Denver, and San Francisco, respectively, or 0 otherwise.