Speaking stata: How best to generate indicator or dummy variables

Abstract

Indicator or dummy variables record whether some condition is true or false in each observation by a value of 1 or 0. Values may also be missing if truth or falsity is not known, and that fact should be flagged. Such indicators may be created on the fly by using factor-variable notation. tabulate also offers one method for automating the generation of indicators. In this column, we discuss in detail how otherwise to best generate such variables directly, with comments here and there on what not to do.