In my previous question, the discussion was about when interaction terms are not statistically significant. In particular, winter-summer and spring-summer were the only seasons that interacted with sale price given heating units. There were 4 other season pairs that were seen to be not statistically significant. If the model that was developed were to be put in production to make predictions, is it statistically defensible to create an indicator variable to indicate the only pairings that should be included? For example, There are six different season pairs: (winter, spring), (winter, summer), (winter, fall), (spring, summer), (spring, fall), (summer, fall). If one of these pairs produced a difference, for example (winter, spring), would you create an indicator variable for a winter-spring difference? If there were two combos that produced a difference, would you then create two indicator variables—one for each interaction? This is totally cryptic. Please don’t hesitate to e-mail for extra discription. Bill Donaldson
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