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st: Interaction effect or running seperate models


From   "Quang Nguyen" <quangn@gmail.com>
To   statalist@hsphsun2.harvard.edu
Subject   st: Interaction effect or running seperate models
Date   Wed, 26 Sep 2007 18:29:26 -1000

Dear all,

Suppose, I had a simple model: Y = Ao + A1*X1 + A2*Z + u, where A2 is
a categorical variable e.g., ethnicity. If I wanted to see how
different ethnic groups may have different effect on Y, I can use an
interaction term: X1*Z or I can run seperate equations fro each
ethnicity. Can you tell me the advantage of each method?

Many thanks!

Quang

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he believed in me." - Jim Valvano
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