Multi Level Regression

[Douglas Rugh (D.Rugh)]

I have a question about the levels of measurement in a multi-level regression model.  The sampling frame is a representative cross section of students throughout the United States at each grade level.  The three selection stages are: (1) geographic areas or primary sampling units (PSUs), (2) schools within PSUs, and (3) students within sampled schools. As for my model, I have an individual level measure of alcohol consumption which is ordinal.  I also have a school level measure of alcohol consumption, which is an aggregate of the individuals within a school--also ordinal.  Then I have a Primary Sampling Unit variable on a scale from 1 to 72.  This third level measure is the one I am confused about.  It is not an ordinal measure, it is a nominal measure.  How do I handle that in the regression?  It is unreasonable to dummy code this variable. Your help will be much appreciated.