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Re: st: Fixed effects of cost function with interations

From   Maarten buis <>
Subject   Re: st: Fixed effects of cost function with interations
Date   Fri, 16 Nov 2007 08:28:42 +0000 (GMT)

--- Anthony Musonda <> wrote:
> I am tryignt o estimate a fixed effects (or even random effects)
> model of the cost function in order to derive marginal cost. How does
> Stata proceed when there are interation terms in the model. Any
> advice on how to deal with this aspect is welcome.

Interaction terms are just variables, we (humans) think they are
special because we know they mean something different, but Stata just
treats them as variables and that is fine: Computers do computing,
humans do interpreting, and for computing you don't need to make a
distinction between interaction terms and other types of variables.

The ATS website has resources on how to interpret results with
interaction terms, see for instance:

Hope this helps,

Maarten L. Buis
Department of Social Research Methodology
Vrije Universiteit Amsterdam
Boelelaan 1081
1081 HV Amsterdam
The Netherlands

visiting address:
Buitenveldertselaan 3 (Metropolitan), room Z434

+31 20 5986715

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