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st: Interaction term or Difference in Differences


From   Quang Nguyen <quangn@gmail.com>
To   statalist@hsphsun2.harvard.edu
Subject   st: Interaction term or Difference in Differences
Date   Mon, 28 Nov 2011 10:53:40 +0800

Hi All:

We have a cross sectional data that has a binary variable indicating
policy P - which is  implemented randomly in a a number of states. We
would like to study the effect of P on some variable i.e., wages.
Given we have only cross sectional data, do you think the following
mode specification is ok?

Wages = Beta0+ Beta1*X + Beta2*Policy+Beta3*States +Beta4*Policy*State+epsilon
where X = Demographic variables

Thanks!
Mike

--
"My father gave me the greatest gift anyone could give another person,
he believed in me." - Jim Valvano




--
"My father gave me the greatest gift anyone could give another person,
he believed in me." - Jim Valvano

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