If you 'code' a variable to have only two levels, 0 and 1, a lot of analytic issues 'go away.' You can process the analysis as a continuous variable, and interpolate response values in the region of say time = 0.4. Whether or not the effect at this time has physical meaning.

And yes, since you have converted the time variable to an (apparently) ratio scale continuous variable, you can treat for all sorts of interactions involving time.

OTOH, you could as well state that the two time points are not related in any way, that they are a variable on a nominal or ordinal scale. then you could perform a complex AoV on the data and avoid any hint of t = 0.4. You could treat for interactions in this manner, also, so far as I can see from here.

Cheers,
Jay

Anupama Ramachandran wrote:

Hi
I have a utility model in which time is treated as a dummy variable with values 0 and 1. In the utility model, time will interact with at least two other terms. If I specify time to be a dummy variable are interactions allowed with dummy variables? What are the specifics I should follow while doing this? Are their any papers which dela with the treatment of time as a dummy variable?
I'd really appreciate any help or suggestions in the same.
Thanks
Anupama
Anupama Ramachandran
Ph.D Student
Dept. of marketing
R.H. Smith School of Business
University of Maryland, College Park


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Warner Consulting, Inc.
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