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In this video tutorial, the process of recoding a scale variable into an ordinal variable with categories is demonstrated using the variable H. The recode is done through two different variable options under the transform menu, allowing the original variable to be preserved while creating a new variable named age-groups. The ranges for grouping are specified through the old and new values section, with the first group being 25 and younger assigned as group 1 and the next group being 26 through 35 assigned as group 2. The ranges for each group are clearly defined and assigned a new value.