Introduction
Last Updated on July 24, 2023 by Editorial Team
Author(s): ___
Originally published on Towards AI.
In this article, I will explain why when building a linear model, we add an x₁x₂ term if we think the variables x₁ and x₂ interact and conclude with a principled method to add interaction terms.
The content of this article is based on Chapter 8 of [1].
I assume the reader has a basic understanding of how linear models work.
Let’s begin by building a model with no interaction terms.
Suppose we would like to model y as a function of x₁ and x₂. Then, a linear model that describes this relationship is:
Figure 1: A linear model with no interaction terms
We call α… Read the full blog for free on Medium.
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