When adding polynomial terms or interaction effects, what key assumption of regression might be violated?

  • Homoscedasticity
  • Independence of observations
  • Linearity
  • Normality of errors
When adding polynomial terms or interaction effects to a regression model, the assumption of linearity might be violated. The linearity assumption in regression analysis states that the relationship between the independent and dependent variables is linear, i.e., a change in the independent variable will result in a constant change in the dependent variable. When adding polynomial terms or interaction effects, we are essentially modeling a non-linear relationship.
Add your answer
Loading...

Leave a comment

Your email address will not be published. Required fields are marked *