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st: RE: RE: RE: interaction


From   "Scott Merryman" <smerryman@kc.rr.com>
To   <statalist@hsphsun2.harvard.edu>
Subject   st: RE: RE: RE: interaction
Date   Sun, 9 Oct 2005 15:07:59 -0500

> -----Original Message-----
> From: owner-statalist@hsphsun2.harvard.edu [mailto:owner-
> statalist@hsphsun2.harvard.edu] On Behalf Of lm335@drexel.edu
> Sent: Thursday, October 06, 2005 6:46 PM
> To: statalist@hsphsun2.harvard.edu
> Subject: st: RE: RE: interaction
> 
> In the interaction model, when group=1 the equation is
> ln(y)=constant+ b2 + (b1 + b3)*time.
> 
> Then the effect of group is (exp(b1+b3)-1)*100. which turns out to be 2.6
> percent.

Is this correct? 

If the model is:

ln(y)= constant + b1*(time) + b2*(group) + b3*(group*time)

Then would not the percent change for a unit change in group be:

Y1/Y0 - 1 = (exp{b0 + b1*T + b2*1 + b3*1*T} / exp{b0 + b1*T}) - 1
          = (exp{b0}exp(b1*T}exp(b2}exp{b3*T} / exp(b0}exp(b1T}) - 1
          = (exp(b2}exp{b3*T}) - 1
          = exp{b2 + b3*T} - 1


Scott



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