Which statement would you use to create a new variable based on conditions?

The correct choice is the IF-THEN statement, as this statement allows for the development of conditional logic directly within the DATA step when creating new variables. By utilizing IF-THEN, you can specify certain conditions under which a new variable should take on specific values depending on the values of existing variables in your dataset.

For example, the IF-THEN statement can be structured to evaluate whether a variable meets a certain condition and then assign a value to the new variable based on that evaluation. This flexibility makes it particularly advantageous when you need to derive different outputs for different scenarios within the same variable.

While the DATA step is essential for data manipulation and variable creation overall, it serves as a framework within which the IF-THEN statement operates. The ARRAY statement is used mainly for managing groups of variables, and while it can facilitate operations across those variables, it does not inherently provide conditional logic like the IF-THEN statement. The LOOP statement iterates over data but does not inherently assign new values based on conditions. Thus, the IF-THEN statement stands out as the most appropriate choice for creating new variables based on specific conditions.