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st: How to interpret the incidence-rate ratio (IRR) of the interaction terms between binary and continuous variable


From   Somrat Punurai <[email protected]>
To   "[email protected]" <[email protected]>
Subject   st: How to interpret the incidence-rate ratio (IRR) of the interaction terms between binary and continuous variable
Date   Mon, 19 Aug 2013 23:53:38 +0700

Dear All,
�
Recently, I read the Stata tip#87 written by Dr. Maarten Buis and his posted reply in
http://www.stata.com/statalist/archive/2011-10/msg00938.html.��

I have some questions regarding the interpretation of incidence-rate ratio (IRR) from the negative binomial regression.� In particular, it is the incidence-rate ratio of interaction terms between the binary variable (dummy) and the continuous variables.
�
In my study, the model specification of negative binomial regression is
�
Y = constant + D1 + b1X1 +� b2X2 + b3D1X1 + b4D1X2
�
Numerical example is�
Y = -1.013 + -1.129 + -0.068X1 + -0.610X2 + 0.054D1X1 + 1.590D1X2
�
Y = the number of mergers and acquisitioin deals
D1 = the dummy variable taking on value 1 if developing countries, and 0 advanced coungries
�
X1 = the difference of corporate tax rate between a country pair� (Continuous variable)
X2 = the presence of double tax treaties (binary variable, value 1 if two countries has double tax treaties, and 0 otherwise)
�
D1X1 = interaction term between the binary and the continuous variable
D1X2 = interaction term between the binary and the binary variable
�
My question is that
�
1. �Is it a right way to think that �when the nation is from developing nation�, the IRR of the factor X1 is �exp(b1 + b3)� and �when the nation is from advanced nation�, its IRR of factor X1 is exp(b1)?
�
2. �How can I interpret the IRR of b3 when the nation is from developing nation or when the nation is from advanced nation.
�
3. �Is it correct to think that when the nation is from developing nation, the IRR of factor X2 is exp(b2+b4) and �when the nation is from advanced nation�, its IRR of factor X2 is exp(b2)?


Best regards,

Somrat Punurai 		 	   		  

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