Hello,
I am doing a linear regression with an interaction term which I am unsure how to interpret correctly. Lets say I have categorial variables: First variable has A and B AND second has x,y and z as categories. If I choose A and x as default/ommited as far as I know you interpret it as follows: b1x is the effect x has if A is true. If I want to know what effect the combination of x and B has I have to add: b1x + b2B + b3(x*B). This is a bit confusing as you have to add b1x in the second combination (x and B) even though the term is interpreted to be the effect of x when A is true.
I am doing a linear regression with an interaction term which I am unsure how to interpret correctly. Lets say I have categorial variables: First variable has A and B AND second has x,y and z as categories. If I choose A and x as default/ommited as far as I know you interpret it as follows: b1x is the effect x has if A is true. If I want to know what effect the combination of x and B has I have to add: b1x + b2B + b3(x*B). This is a bit confusing as you have to add b1x in the second combination (x and B) even though the term is interpreted to be the effect of x when A is true.