Re: st: Intepretation of interaction terms

[lreine ycenna <lreine.ycenna@gmail.com>]

In fact,
another similar question:

y = a + b + a x b

I want to test this equation for group1 (dummy G1 ==1), while a , b, y
are numeric.

In Stata, it would be:

regress y a b axb G1 axG1 bxG1 axbxG1

we must include G1 individually in the equation.

Also, we need to add up the coef of G1 to get the true effect for this group.

My question is, since G1 is a dummy, how should we interprete G1? i.e.
what does the coefficient for G1 mean to Y (GDP)?




On 24 May 2011 07:36, lreine ycenna <lreine.ycenna@gmail.com> wrote:
> .....................................................................................................
> Thanks for the great help Maarten. Yes definitely need to get my text
> books out for some revision of econometrics!
> As for now, it's much clear. I can move on to the next stage :)
>
> On 23 May 2011 14:02, Maarten Buis <maartenlbuis@gmail.com> wrote:
>> On Mon, May 23, 2011 at 2:33 PM, lreine ycenna wrote:
>>> axb is the effect of both a and b when c =0...etc.
>>
>> The coefficient of axb is the change in effect of a for a unit change
>> in b. It is also the change in effect of b for a unit change in a.
>>
>> Hope this helps,
>> Maarten
>>
>> --------------------------
>> Maarten L. Buis
>> Institut fuer Soziologie
>> Universitaet Tuebingen
>> Wilhelmstrasse 36
>> 72074 Tuebingen
>> Germany
>>
>>
>> http://www.maartenbuis.nl
>> --------------------------
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>

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