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Re: st: interpretation of squared term

From   Sarah Elizabeth Edgington <>
Subject   Re: st: interpretation of squared term
Date   Thu, 26 Aug 2010 12:55:59 -0700

The basic intuition here is that you're generating a quadratic curve. If you have a positive effect of age and a negative effect of age squared that means that as people get older the effect of age is lessoned. A positive effect of age and a positive effect of age squared means that as people get older the effect is stronger. You probably want to graph it once to get a sense of the pattern even if you don't present those graphs. Meanwhile have you considered breaking age into categories (or using individual age dummies if your sample size is sufficient)? A quadratic is less restrictive that a simple linear specification, but it is still a restriction. You may not be accurately capturing the actual age pattern with your model. Of course a linear spline is also a possible choice. Depending on your discipline, though, that may not be the conventional solution.


At 12:39 PM 8/26/2010, David Bai wrote:
Thank you, Maarten.

I include the squared term because this year variable might be non-linearly related to the outcome. Is there an easier way to roughly interpret the year effect? I do not want to go deeper to have an exact interpretation of the two year variables. E.g., what does a negative coefficient for a squared term mean? Thank you.

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