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# st: how to interpret interaction effects in negative binomial model

 From "WANG Shiheng" To statalist@hsphsun2.harvard.edu Subject st: how to interpret interaction effects in negative binomial model Date Tue, 23 Mar 2010 10:11:27 +0800 (HKT)

```Dear all,

I have a question about how to interpret the interaction items in negative
binomial regression.

In the following model “post” is a dummy variable (0 or 1) to indicate two
different periods (0 represents the first period, 1 represents the second
period).  “treatment” is a dummy variable (0 or 1) to indicate two
different groups –“treatment sample”(1) vs. “control sample” (0). The
interaction is the product of the two dummies. The dependent variable is
the number of analysts. My research objective is to examine whether the
number of analysts changes over the two periods, and whether the changes
over periods differ between the treatment sample and control sample.

I have the following questions for the estimates below:

(1) the coefficient on "post" is not significant, does this mean that the
change in the number of analysts from period 1 to period2 is not
statistically significant in the control group?

(2) the coefficient on the interaction term "post*treatment" is
significantly positive, does this mean that the change in the number of
analysts from period 1 to period2 is significantly greater in the
treatment sample than the control sample? How to interpret the coefficient
on the interaction term exactly? How can I calculate if the changes in
number of analysts from period 1 to period 2 differ between the treatment
sample and control sample?

Negative binomial regression                   Number of obs   =      30274
Dispersion = mean                               Wald chi2(37)   =          .
Log pseudolikelihood = -27412.392              Prob > chi2     =          .

(Std.
Err.
for
45
clusters
in
n)
---------------------------------------------------------------------------
|             Robust
Analysts  |    Coef.    Std. Err.     z     P>|z|   [95% Conf. Interval]
-----------+-------------------------------------------------------------
post          .0610886  .0743914     0.82   0.412   -.0847159    .2068931
treatmen     -2.975135  .1591135   -18.70   0.000   -3.286992   -2.663278
post*treatment .214007  .0730457     2.93   0.003    .0708402    .3571739
---------------------------------------------------------------------------

--

Shiheng Wang

Assistant Professor
Department of Accounting
Hong Kong University of Science and Technology

Tel: 852 2358 7570
Fax: 852 2358 1693
Email: acwang@ust.hk

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```