Re: st: How do I test whether the time path of income differs between two groups?

[Maarten buis <maartenbuis@yahoo.co.uk>]

--- On Mon, 29/11/10, andreas nordset wrote:
> The income time paths of the two groups will differ for two
> reasons:
> Firstly group 1 has higher average income than group 2, and
> secondly group 1 experiences a stronger drop, in percentage
> terms, from, let's say, relative year -2 to relative year 0.
> Now in fact I would like to test only whether the drop is
> significantly different, not whether the levels are. If I
> do the F test on all interaction terms, then I will
> presumably also get a high test statistic and hence reject
> the Null of no difference if the time paths are exactly
> identical, but are just sufficiently parallelly shifted.

The test I proposed will leave out the main effect of group,
so it will not include the paralel horizontal shift. 
However, if you really care about relative changes you need 
to think of effects in terms of ratios rather than 
differences. In that case I would use -glm- with the 
-link(log)- and -eform- options, see Cox et al. (2007) for
a nice discussion of that. You can use the same -test-, 
as I discussed in Buis (2010).

M.L. Buis (2010) "Stata tip 87: Interpretation of 
interactions in non-linear models", The Stata Journal, 10(2), 
pp. 305-308.

Nicholas J. Cox, Jeff Warburton, Alona Armstrong, Victoria J. 
Holliday (2007) "Fitting concentration and load rating curves 
with generalized linear models" Earth Surface Processes and 
Landforms, 33(1):25--39.
<http://www3.interscience.wiley.com/journal/114281617/abstract> 

Hope this helps,
Maarten

--------------------------
Maarten L. Buis
Institut fuer Soziologie
Universitaet Tuebingen
Wilhelmstrasse 36
72074 Tuebingen
Germany

http://www.maartenbuis.nl
--------------------------


      

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