Need help with Dummy Variables on SMART-PLS 4

[mildredwalley]

Hi guys, I'm kind of panicking because I'm at the final run for my Master's dissertation and I've seen several videos on how to do this and every single one of them has a different approach to dummy variables, I would like to know if anyone here can help me out with this question.

I have a model with 4 variables (A, B, C and D) where the first 3 connect with the D, pretty straightforward.

However, I have a categorical variable which is Generations and it includes 4 generations. I want to test on Smart-PLS 4 this variable, considering it's part of the hypothesis I made, for example: D differs across Generations, A differs across generations. The thing is, I've seen examples where people put the categorical variable in the model with 3 of the 4 dummies attached (one serving as a reference) and some where they put all 4. Some people have told me to run these categorical hypothesis through SPSS, some say it's possible to do it through Smart-PLS. I'm a bit lost right now, I don't know what approach to have, can anyone help me out?

[jmbecker]

If you want to assess the effect of Generations on D, you will need to put the variables as dummies in the model. You will need to use 3 single-item dummy variables, and the left out category will be the reference category (i.e., you compare the effect of the other generations against this reference). Thus, you need to decide which is a meaningful reference category.
You cannot put all 4 categories as dummies, because they would be perfectly collinear.

If you want to asses how the effect of A on D changes with generations you could use the dummies as moderators. However, you could also run multi-group models. One for each generation. However, then you cannot assess the effect of generation on D, because in each group there will be no variation in generation as it is only one generation.