# Re: st: interpretation of interaction terms

 From Jose de Sousa To statalist@hsphsun2.harvard.edu, Shehzad Ali Subject Re: st: interpretation of interaction terms Date Tue, 16 Dec 2008 10:59:31 +0100

```Dear Shehzad,
> Thanks, Rene and Dave. Semi-elasticity explanation makes good sense.
> Please feel free to share any references if you get a chance.
A simple reference is Woolridge, Introductory Econometrics.
* Chapter 2, p.45, Table 2.3. for a nice discussion of elasticity and
semi-elasticity differences.
* Chapter 7 for a discussion on "Interpreting Coefficients on Dummy
Explanatory
Variables When the Dependent Variable Is log(y)"
Best,
Jose

> On Dec 15 2008, RenÃ© Geppert wrote:
>
>> In an all linear specification, regression coefficients are usually
>>  interpreted as marginal effects.
>> Accordingly, in a log-log-specification, regression coefficients
>> can be thought of elasticities.
>> And for a lin-log-model, hence, the coefficient represent something
>>  like semi-elasticities.
>>
>>
>> David Airey schrieb:
>>> Yes, but I think the basic understanding or interpretation of
>>> regression coefficients for continuous or binary variables is not
>>> altered when a variable has been log transformed. It is true that
>>> interactions can be present or absent depending on whether or not
>>> a variable has been transformed, because interactions are scale
>>> dependent.
>>>
>>> -Dave
>>>
>>> On Dec 14, 2008, at 7:31 PM, Shehzad Ali wrote:
>>>
>>>> Hi,
>>>>
>>>>
>>>> 1. Coefficient on an interaction term for a dummy and
>>>> log-transformed variable in an OLS model when the dependent
>>>> variable is in natural units or is also log-transformed
>>>>
>>>> 2. Coefficient on an interaction term for an untransformed
>>>> continuous and log-transformed variable in an OLS model when the
>>>> dependent variable is in natural units or is also log-transformed
>>>>
>>>> 3. Coefficient on an interaction term between a dummy and
>>>> log-transformed variable in a probit regression
>>>>
>>>> Thank you,
>>>>
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>
>
>
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