1. Discounts on Car Purchases: Does Salesperson Identity Matter?
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Assume there are five salesfolks:
Andy, Bob, Chuck, Dave and Ed
Take one (e.g., Andy) as the default (no/no/no/no) case, and add four new “dummy” variables
DB = 1 only if Bob, 0 otherwise
DC = 1 only if Chuck, 0 otherwise
DD = 1 only if Dave, 0 otherwise
DE = 1 only if Ed, 0 otherwise
The coefficient of each (in the most-complete model) will differentiate the average discount that each salesperson gives a customer from the average discount Andy would give the same customer

2. Does Salesperson Identity Matter?
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Does Salesperson Identity Matter?
Imagine that , after adding the new variables (four new columns of data) to your model, the regression yields:
Discountpred =  Age –  Income  Sex  DB + (–300)  DC + (–50)  DD  DE
With similar customers, you’d expect Bob to give a discount $240 higher than would Andy
With similar customers, you’d expect Chuck to give a discount $300 lower than would Andy, $540 lower than would Bob, and also lower than would Dave (by $250) and Ed (by $670)

3. Does “Salesperson” Interact with “Sex”?
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Does “Salesperson” Interact with “Sex”?
Are some of the salesfolk better at selling to a particular Sex of customer?
Add DB, DC, DD, DE, and DBSex, DCSex, DDSex, DESex to the model
Imagine that your regression yields:
Discountpred =  Age  Income  Sex
+ 240  DB – 350  DC + 75  DD + 10  DE
– 375  (DBSex) – 150  (DCSex) – 50  (DDSex)  (DESex)
Interpret this back in the “conceptual” model:
Discountpred =  Age –  Income  Sex
+ (240 – 375Sex)  DB + (–350 – 150Sex)  DC
+ (75 – 50Sex)  DD + ( Sex)  DE

4. Discountpred = 980 + 9. 5  Age – 0. 035  Income + 446  Sex
Discountpred =  Age –  Income  Sex (240 – 375Sex)  DB + (–350 – 150Sex)  DC (75 – 50Sex)  DD + ( Sex)  DE
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Given a male (Sex=0) customer, you’d expect Bob (DB=1) to give a greater discount (by $240-$3750 = $240) than Andy
Given a female (Sex=1) customer, you’d expect Bob to give a smaller discount (by $240-$3751 = -$135) than Andy
Chuck has been giving smaller discounts to both men and women than has Andy, and Dave and Ed have been giving larger discounts than Andy to both sexes
And we could take the same approach to investigate whether “Salesperson” interacts with Age, including also DBAge, DCAge, DDAge, DEAge in our model