title: Subset selection with LASSO involving categorical variables
body: <p>I ran a LASSO algorithm on a dataset that has multiple categorical variables. When I used model.matrix() function on the independent variables, it automatically created dummy values for each factor level. </p>
  
  <p>For example, I have a variable "worker_type" that has three values: FTE, contr, other. Here, reference is modality "FTE". </p>
  
  <p>Some other categorical variables have more or fewer factor levels. </p>
  
  <p>When I output the coefficients results from LASSO, I noticed that worker_typecontr and worker_typeother both have coefficients zero. How should I interpret the results? What's the coefficient for FTE in this case? Should I just take this variable out of the formula?</p>