What does the BY statement do in a SAS DATA step?

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The BY statement in a SAS DATA step is used to process data groups. When a dataset is sorted by specific variables using the SORT procedure, the BY statement enables the DATA step to manage processing for each of these groups sequentially. This means that the statements within the DATA step will be executed for each group of observations that share the same values in the specified BY variables.

For example, if you have a dataset sorted by a variable "Category", and you include the BY statement for "Category" in your DATA step, SAS will process each group of observations with the same category value individually. This group-wise processing is particularly useful for performing operations such as calculations or generating summaries that are applicable to each subgroup.

In contrast, the other options refer to different functionalities in SAS. The first option speaks to sorting, which involves ordering the data rather than processing groups. The labeling of output data sets is related to the LABEL statement, not the BY statement. New variables can be defined using the assignment statement in the DATA step, but that does not pertain to the functionality of grouping observations that the BY statement provides.

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