In analysis of variance, there is usually little attention for interpreting the terms of the effects themselves, especially for interaction effects. One of the reasons is that the number of interaction-effect terms increases rapidly with the number of predictor variables and the number of categories. In this paper, we propose a new model, called the interaction decomposition model, that allows to visualize the interactions. We argue that with the help of the visualization, the interaction-effect terms are much easier to interpret. We apply our method to predict holiday spending1 using seven categorical predictor variables.

hdl.handle.net/1765/1189
Econometric Institute Research Papers
Report / Econometric Institute, Erasmus University Rotterdam
Erasmus School of Economics

Groenen, P.J.F, & Koning, A.J. (2004). A new model for visualizing interactions in analysis of variance (No. EI 2004-06). Report / Econometric Institute, Erasmus University Rotterdam. Retrieved from http://hdl.handle.net/1765/1189