There are many different ways of choosing a reference category:

• The largest category, because we want a stable group to compare the other categories to.
• The group in the middle, to represent the average.
• The “best off” category – if increasing values of the outcome is more negative.
• The “worst off” category – if increasing values of the outcome is more positive.

Note Never choose a very small category – you may end up with very strange estimates.