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# Re: st: AW: mfx-Elasticity for a dummy variable

 From A Loumiotis To statalist@hsphsun2.harvard.edu Subject Re: st: AW: mfx-Elasticity for a dummy variable Date Tue, 8 Jun 2010 14:05:30 +0300

```Nyasha,

The elasticity of y with respect to the dummy variable in the way that
you have defined your regression will be the coefficient of the dummy
variable T times the dummy variable itself.  If you calculate it at
the mean point of T then it will be different from the coefficient of
the dummy variable.  If you calculate it at T=1, it will be the same.

However elasticities with respect to dummy variables have no
meaningful interpretation because the dummy variable changes in a
discrete fashion (from 0 to 1).

Antonis Loumiotis

On Mon, Jun 7, 2010 at 6:24 PM, Nyasha Tirivayi <ntirivayi@gmail.com> wrote:
> Dear Martin
>
> Thanks for the code. Now the results are different. I was using the
> wrong code i.e mfx , dyex at(mean) instead of mfx compute,
> varlist(logweight) dyex at(mean).
>
> Regards
>
> Nyasha Tirivayi
> Maastricht University
>
>
>
> On Mon, Jun 7, 2010 at 9:16 AM, Martin Weiss <martin.weiss1@gmx.de> wrote:
>>
>> <>
>>
>> What is the difference of your example to this one - where the marginal
>> effects do seem to change:
>>
>>
>> *************
>> sysuse auto, clear
>> gen logprice=log(price)
>> gen logweight=log(weight)
>> reg logprice length logweight foreign
>> mfx compute, varlist(logweight) dydx at(mean)
>> mfx compute, varlist(logweight) eyex at(mean)
>> mfx compute, varlist(logweight) dyex at(mean)
>> mfx compute, varlist(logweight) eydx at(mean)
>> *************
>>
>>
>>
>> HTH
>> Martin
>>
>> -----Ursprüngliche Nachricht-----
>> Von: owner-statalist@hsphsun2.harvard.edu
>> [mailto:owner-statalist@hsphsun2.harvard.edu] Im Auftrag von Nyasha Tirivayi
>> Gesendet: Montag, 7. Juni 2010 02:50
>> An: statalist@hsphsun2.harvard.edu
>> Betreff: st: mfx-Elasticity for a dummy variable
>>
>> Dear All
>>
>> I am trying to estimate elasticity for a dummy explanatory variable in
>> the following model
>>
>> ln(y) = a + b ln(x) + T + D Z
>>
>>
>>
>> I am interested in calculating the elasticity for T a dummy variable
>> for a "treatment". What is the formula in stata? Is it mfx,dy/dx or
>> mfx,dyex?
>>
>>
>>
>> I have done mfx,dyex and the result still remains the coefficient for
>> T. Could it be that simple? Or there is another way ?
>>
>>
>>
>>
>>
>>
>> Nyasha Tirivayi
>>
>> Maastricht University
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```