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Re: st: centering explanatory variables around zero


From   Richard Williams <Richard.A.Williams.5@ND.edu>
To   "statalist@hsphsun2.harvard.edu" <statalist@hsphsun2.harvard.edu>, "statalist@hsphsun2.harvard.edu" <statalist@hsphsun2.harvard.edu>
Subject   Re: st: centering explanatory variables around zero
Date   Sun, 09 Aug 2009 14:31:26 -0500

At 12:50 PM 8/9/2009, Nikolaos Pandis wrote:
I have the following model

y=a + b1x1 + b2x2

y and x2 are continuous
x1=categorical with 3 levels

You shouldn't include x1 as is. You should break it up into dummy variables. e.g. if for x1, 1 = Catholic, 2 = Protestant, 3 = Others, it makes no sense to treat it as continous.

I find a large difference in the p-values for the explanatory variables between the interaction and no-interaction model.

I centered for the continuous variable x2 ((sum x2, gen cx2=x2-r(mean)).

I get similar p values for interaction and no-interaction models.

Question: How about the categorical explanatory variable? Is it appropriate to center this variable also? Does it make any sense?

No. Again, it shouldn't be in there in the first place; and if you did dichotomize it you still wouldn't center.

This handout goes over the advantages of centering and how to interpret results:

http://www.nd.edu/~rwilliam/stats2/l53.pdf


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Richard Williams, Notre Dame Dept of Sociology
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