st: Explaining interaction terms

 From lm335@drexel.edu To statalist@hsphsun2.harvard.edu Subject st: Explaining interaction terms Date Tue, 04 Oct 2005 16:14:38 -0400

```Hello,
I have 2 questions regarding multiplicative regression models. I hope that the statisticians in the group can help me out.

1) I have a regression model with the dependent variable log-transformed and the first independent variable X1 as taking 0 if belonging to group1 and 1 if belonging to group2, and the second variable X2 denoting time. In this model both the independent variables are significant and it was seen that for the two cases of X1, the curves have different slopes.

I considered another model with an interaction term between X1 and X2. In the output, the group effect is not significant, but the interaction effect is.

Regression with robust standard errors		 Number of obs=     125
F(  3,    42)	=   86.36
Prob > F	=  0.0000
R-squared	=  0.7339

Number of clusters (ID) = 43			             Root MSE	=  .50028

Robust
lnY   Coef.  Std. Err.   t  P>t  [95% Conf. Inter]
X2   .0826   .0098    8.43  0.0	  .062	.102
X1  -.2171   .1892   -1.15  0.26 -.599  .164
X1X2 .0264   .0125    2.10  0.04  .001  .051
cons 1.91    .1536   12.42  0.0   1.598  2.218

In the above output how should one interpret the effect of the interaction term in the model?  For group1, can we say that for a one unit change in X2, the value of y changes by a percentage? Or is the only way to express the increase in Y by specific value of X2?

2) In the same model as above is there a way to find the point where the slope starts to increase: (inflection point?) (I tried spline regression, but can’t get a good fitting model).

Thank You

Leny Mathew

```
```begin:vcard
n:Mathew;Leny
fn:Leny Mathew
tel;work:215 762 2069
org:Drexel University College of Medicine;OB/GYN control
version:2.1
email;internet:lm335@drexel.edu
title:Data Analyst
end:vcard

```