I want to predict shop sales from a set of independent variables which consists of shop attributes like floor space, no. of stuff of a specific store (continuous variables) and also location of the store which is a categorical variable (binary coding) like east west south. I have some questions.
If I run stepwise regression for variable selection and if one of the included dummy variable gets dropped , what does that mean?
Is it necessary to include interaction terms with dummy variables and continuous variables if they are significant? I am asking this because my motive is to predict sales.
Should I include interaction terms before running stepwise regression?