Question
Diagram two observed variables $X 1$ and $X 2$ that predict a third observed variable $Y$. X1, and X2 are correlated.
Step 1
In this case, we have two observed variables, \(X_1\) and \(X_2\), which will be represented as circles or ovals in the diagram. Show more…
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Suppose that E(y) is related to two predictor variables x1 and x2 using one of two models. Model 1: E(y) = 5 + x1 - 3x2 + x1x2. Model 2: E(y) = 5 + x1 - 3x2. The addition of the extra term allows for x1 and x2 to both be quantitative variables. The addition of the extra term allows for x1 and x2 to be dummy variables. The addition of the extra term allows for a possible interaction between x1 and x2.
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