Hanging indents are rarely seen in most ordinary running text and are used for very particular purposes. Usually, this is where the opening word or phrase of the paragraph acts a little like a subheading, with every other word in the paragraph relating directly to it. One way to think of a hanging indent is as an alternative to a subheading, with the opening word or phrase standing outside the body of the paragraph as a kind of marker to it. Paul Brians, Emeritus Professor of English at Washington State University, notes that this kind of text is now sometimes described as an "outdent."
Bibliographies often make use of hanging indents, to ensure names of authors stand out clearly from titles and other details, such as publisher, editor and publication date. This is an example of the opening words acting as a kind of subheading. The hanging indents enable a reader to quickly scan a list of books for a particular author. Students often present bibliographies in this format when they submit essays or term papers.
Footnotes often use hanging indents, so that the number or symbol used to introduce the footnote stands out clearly from the remaining text. This is especially useful when there are many footnotes, or when the size of the print is very small. A hanging indent creates a blank space to the left of its paragraph, making the words a lot easier on the eye in cramped conditions.
Entries in a dictionary are often presented with hanging indents. The headword to be defined comes first, usually in bold print. The rest of the entry is indented and this ensures the headwords are easy to spot. Some other reference texts follow the same format. This is especially true of a text that deals with multiple brief factual entries, such as a directory, brochure or index.
Scriptwriters often use hanging indents to present a page of dialogue clearly. The characters' names appear hard against the left margin, with their speeches laid out using hanging indents. That way, it is easy for the actors to see when there is a change of speaker, particularly when dealing with passages which contain longer speeches.
To create a hanging indent in Microsoft Word, versions 97 to 2003, highlight your text, choose "Format", and select "Paragraph" from the drop-down menu. On the "Indents and Spacing" tab, look for "Special" and choose "Hanging" from the menu. Adjust the size of your indent using the list to the right, labeled "By." Press "OK" and your hanging indent will appear. (See References 1) For later versions of Word, place the insertion point where you want the indent, and on the "Home" tab of the ribbon, double-click the icon, bottom-right of the paragraph group. When the "Special" menu appears, the process is the same as earlier versions of Word. (See References 4)