Colleagues/moderators, let me bring you attention to the tag indicator-variables. Questions labeled with it show multiple understandings of the term.
Some of the understandings are really special at all (such as indicators as "items loaded in a factor analysis"), but two-three most frequent (seen not only locally but in "literature" at wide) are:
- Indicator variable is any binary variable (1 = "present" or "this category"; 0 = "absent" or "not this category").
- A narrower definition, indicator variable is just a dummy (aka one-hot) variable, i.e. one of the binary variables constituting the binary set corresponding to a single nominal variable.
- Indicator variable is a term wider than for binary coding scheme and is a synonym of contrast variable (i.e. deviation or Helmert codings are also "indicator").
See this and some other threads. My own vote oscillates between definitions (1) and (2), but not with (3).
What is your understanding? What should we do with tag
indicator-variables in general? Should it be kept?