How to Include Interaction Terms in Statistical Models?
Interaction terms are incorporated into statistical models by multiplying the variables of interest. For example, in a logistic regression model, if you are interested in the interaction between smoking (X1) and alcohol consumption (X2) on lung cancer risk (Y), you would include the product of these variables (X1*X2) in the model. The model would look like this:
Y = β0 + β1X1 + β2X2 + β3(X1*X2) + ε
Here, β3 represents the interaction effect. If β3 is statistically significant, it indicates that the effect of smoking on lung cancer risk depends on alcohol consumption levels, or vice versa.
