When you are estimating separate regressions, you are testing whether trade is significantly different from zero in each group of nations. When you analyze the entire data set with an interaction, the interaction tells you whether the effect of trade is significantly different in the two groups. Those are separate questions. There is no necessary contradiction between your two sets of results. David Greenberg, Sociology Department, New York University
----- Original Message -----
From: Carlos Rodriguez <[email protected]>
Date: Monday, July 28, 2008 6:10 pm
Subject: st: interactions and subsets
To: [email protected]
> Dear all,
>
> I am working with TSCS data in STATA8 and would appreciate some advice
> on this issue.
> I have run some regressions with an interaction between trade and a
> dummy for late industrializers. The interaction was not significant.
> However, I reran the analysis dividing my dataset into two groups:
> early industrializers and late industrialzers. It turns out that
> trade iIS significant in the set of late industrializers. Why would
> the interaction between trade and late industrializers in the whole
> sample fail to achieve significance whereas trade comes up as highly
> significant when the regression is run separtely on the group of
> countries that are late indutrialers? Can the difference be put down
> to the dissimialr Ns? Moreover, which result shall I "believe"?
>
> thanks for your advice.
> Carlos Rodriguez
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