Usually, is the categorical variable an independent variable or a dependent variable?

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Categorial variables can be used as the dependent variables or independent variables. But whatever the case, categorical variables require special treatment in estimation to capture the impacts we are interested in. When dependent variables are categorical data we use a special branch of estimation models called discrete choice models, including logit model, ordered probit model, and multinomial logit model. When categorical variables are used as independent variables, the most common method for including categorical data in regressions is to create dummy variables for each possible category.