What is the PROC FORMAT procedure used for in SAS?

The PROC FORMAT procedure in SAS is primarily utilized to define custom formats for variables. This capability allows users to customize the way data appears in reports and analysis, enhancing readability and interpretation of the data. By creating user-defined formats, you can control how values are displayed, categorize data into meaningful groups, and improve the overall clarity of output without altering the underlying data itself.

For instance, if you have a numeric variable representing codes for regions (like 1 for North, 2 for South), you can use PROC FORMAT to create a format that translates those codes into more descriptive text (like "North" and "South"). This facilitates easier understanding during data reporting and simplifies the process of data presentation in graphs and tables.

While sorting datasets, merging datasets, and generating reports are all important functionalities in SAS, they are handled by different procedures and methods different from PROC FORMAT. The primary focus of PROC FORMAT is indeed on creating and managing custom formats for variables, which is why this choice is the correct representation of the procedure's purpose.