choice-metrics.com

Dear all,

I am new to Ngene and have a question with regard to effects coding, which I hope you can help me:

1) I know that with dummy coding, the last level is the base level. So A.dummy[0.140] * X[0,1] means that level 1 has utility 0 and level 0 has utility 0.140, so level 1 is preferred over level 0 in this syntax.
Is the same rule (that the last level is the base level) applies for effects coding as well?

Thank you so much in advance.

Best, Nasrin

Dummy coding:

b.dummy[0.1|0.3] * X[1,2,3]

level 3 is the base level.

level 1 has utility 0.1
level 2 has utility 0.3
level 3 has utility 0

This means that level 3 is the least preferred level and level 2 is the most preferred level.

Effects coding:

b.effects[0.1|0.3] * X[1,2,3]

level 3 is the base level

level 1 has utility 0.1
level 2 has utility 0.3
level 3 has utility -0.4 (namely, -0.1-0.3)

So the main difference is that with dummy coding the base level has utility 0, while in effects coding the base level has utility -b1-b2-b3 etc such that the average contribution to utility equals 0.

Michiel

Dear Michiel,

Thanks for the very clear explanation

Best, Nasrin