Final answer:
To use categorical data in a regression model, it needs to be transformed into numerical values through encoding methods like one-hot encoding, label encoding, or ordinal encoding.
Step-by-step explanation:
In order to use categorical data in a regression model, the categorical data needs to be transformed into numerical values using a technique called encoding. There are different encoding methods like one-hot encoding, label encoding, and ordinal encoding that can be used depending on the nature of the categorical data. Once the categorical data is encoded, it can be used as independent variables in the regression model.