st: interaction term of logritham of raw data----what form it should be?

[Xiaoheng Zhang <zhangx@tcd.ie>]

Hello all,

I have two variables that are

agglopharma = number of firms (ranging from 5 to 300)
eatr = effective average tax rate (ranging from 8.5 to 55)

They all enter the conditional logit regression in log form.I would like to use
interaction term of these two variables(also in log form),which one should I
use?

ln(agglopharma*eatr) = ln(agglopharma)+ln(eatr)

or

ln(agglopharma)*ln(eatr) = ln(agglopharma+eatr)?

Thanks for reading anf TIA!

Kevin

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