One-Way Analysis    Targeting    Two-Way Analysis    Regression

General Practice for Using Interaction Terms in a Linear Equation

• Put the interaction term (variable) in the equation with the original variables. If it is significant (usually p=<.05, unless it is a highly interesting variable) keep it in; if not, drop it and rerun the regression equation without it. The coefficients of the variables will be affected by the interaction term because of multi-collinearity.
  
• If interaction exists, there will be significantly different slopes in the two variable lines. A good way to understand this is to plot the results as graphs.

Interaction terms are not something to use indiscriminately, instead they are terms that are included because there is a strong argument to convince you that there is something about these two variables that might cause them to have a relationship with each other as well as with the outcome, or there is strong evidence in the literature showing that these variables have an interactive effect.

The rule then is if the interaction term is significant (usually at p<.05), it should remain in the final equation. Sometimes this leads to a lowering of the individual coefficients in the model due to the collinearity (needs explanation) of the variables, which will be dealt with later and cannot be helped. If the interaction term is not significant, it is dropped and the model is rerun without it.

To test for interaction we need to create an interaction variable. To do this we must use the transform option in SPSS.

                    1. Click transform on the tool bar, and select compute.

                    2. In the box labeled target variable, type intculir.

                    3. From the list of variables, scroll to logcult and click on it.

                    4. Click on the arrow to the left of the box labeled numeric expression. Logcult should
                        now be in the numeric expression box.

                    5. On the key pad inside the compute box, click on the multiplication button (*).

                    6. From the list of variables, scroll to logirr99 and click on it; click the arrow and move
                        it into the numeric expression box.

                    7. Click OK.

                     8.  The interaction term is now created at the end of the dataset.